MARKET WRAP: JSE edges higher on easing trade tension

13 December 2018 - 19:51 By Karl Gernetzky
Picture: REUTERS
Picture: REUTERS

The JSE gained for a third consecutive session on Thursday, amid improved sentiment due to cooling tension between the US and China.

Local factors were once again in the driving seat, with activity subdued as businesses close for the forthcoming holidays. Major global risk events that remain include Brexit issues, and the US Federal Reserve's interest-rate decision next week.

The JSE added 0.28% to 51,744.2 points, while the top 40 was flat. Industrials fell 0.28% and property stocks 0.36%. Gold and platinum miners both added 1.98%, and banks 0.93%.

Trade in Naspers was choppy, with the market heavyweight giving up earlier gains to close 1.3% lower at R2,820.01.

Diversified miners fared well, despite the euro weakening after European Central Bank (ECB) governor Mario Draghi said eurozone inflation was likely to be softer than expected in 2019, reported Dow Jones Newswires.

Glencore rose 2.59% to R53.14 and Anglo American 2.64% to R303.46.

Exxaro jumped 7.08% to R138.46 and Assore 3.22% to R297.15.

Asian markets made good gains, while their European counterparts were mixed. China has agreed to resume soyabean imports from the US, together with lower tariffs on vehicles imported from that country, raising hopes that a deal could be struck between the two before a March 2019 deadline.

Although easing trade tension is positive for stock markets, the upside is poised to face obstacles down the road. Global equity bulls remain threatened by concerns over plateauing global economic growth, Brexit turmoil and political risk in France among many other geopolitical risk factors, said FXTM research analyst Lukman Otunuga.

Markets were watching UK Prime Minister Theresa May's visit to Brussels, where she is widely expected to seek further concessions, in order to get enough support to get her draft Brexit deal accepted by Parliament.

Anglo American Platinum gained 2.53% to R532.99, after saying earlier it expected headline earnings in the year to end-December to increase by at least R777m from the previous year’s R3.89bn. Basic earnings were anticipated to be at least R302m higher than 2017’s R1.51bn.

Sibanye-Stillwater surged 4.96% to R10.16, after saying earlier it had extended a recent wage agreement to all its employees, including those belonging to the Association of Mineworkers and Construction Union (Amcu), which has refused to sign.

Rand hedge British American Tobacco lost 1.31% to R486.14.

Shortly after the JSE closed the Dow was up 0.48% at 24,636.01 points, while in Europe, the FTSE 100 and CAC 40 were flat, with the DAX 30 up 0.2%.

Gold was down 0.16% at $1,243.04 an ounce and platinum 1.47% at $793.1. Brent crude was up 0.49% at $60.41 a barrel.