Stocks rise as vaccine news boosts risk appetite

South Africa’s main stock index gains for a second day, rising 0.4% by 10 a.m. in Johannesburg, as reports that a Covid-19 vaccine may be available earlier than expected drives risk appetite higher.

The biggest listed companies, Naspers, Richemont and Anglo American, led gains, with the market shaking off declines in more than half of the 150 listed companies, including from gold miners and Old Mutual.

Sentiment got a boost from data showing US manufacturing expanded last month at the fastest pace since 2018 and Chinese factory data signaling rising global demand for exports, a sign the world economy is recovering from the pandemic.

  • Naspers, with a 20% weighting in the index, as well as its subsidiary, Prosus NV, advanced Wednesday, rising 1.7% and 1.6% to propel index higher. The gains were driven by advances in tech giant Tencent, which climbed 1.5%.
    • Naspers holds a 31% stake in Tencent through Prosus.
  • Rand-hedge Richemont, which has an 8% weighting in the index, advanced 1.9% as the currency came under pressure from a rebounding dollar.
  • Shoprite Holdings helps drive gauge for food and drug retailers rises for a second day, up 2.3%.
    • Shoprite +4.8%, biggest jump in more than three weeks, after being upgraded to buy by HSBC.
    • Bid Corp +1.5%, Clicks Group +2.1%, Pick n Pay Stores +3.5%, Spar Group +1.5%, Dis-Chem Pharmacies +0.3%
  • Miners halt a three-day rally, fall 0.3% as weakness in BHP Group and gold producers overwhelm gains from iron ore producers Anglo American, Exxaro and Glencore.
    • Anglo American +0.9%, Glencore +1.8%, Exxaro +1.2%, African rainbow Minerals 0.6%, as iron ore prices rise.
    • BHP -1.1% as coal workers in Colombia strike over wages.
    • Sub-index for gold miners drops for a second day, down 1.3%, as dollar strength, and signs of recovery in some economies damped demand for safe-haven assets.
      • Gold Fields -1.7%, AngloGold Ashanti -1%, Harmony Gold -1.3%, DRDGold -2.7%, Pan African Resources -1.9%
  • Old Mutual drives insurers down 1.1%.
    • Old Mutual -3%, after company removed from STOXX600.
    • Sanlam -0.5%, Discovery -0.5%, Liberty Holdings -0.4%.
  • Index for banks stocks retreats 1% as the rand drops.
    • FirstRand -1.3%, Standard Bank -1.3%, Nedbank -1.1%, Absa -0.4%, Investec -0.9%.
  • Foreigners remained net sellers of South African stocks for a third day Tuesday, disposing R1.6 billion worth of shares, according to bourse operator, JSE Ltd.
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