MARKET WRAP: Banks and financials gain despite fall in rand

The JSE closed higher on Thursday, with bank and financial shares rising despite a weaker rand.

The all share gained 0.37% to 58,743.6 points, and the top 40 0.42%. Banks and financials stood out as the biggest contributors to the gains with the indices adding 1.46% and 1.51%, respectively.

Investec Ltd rose 3.3% to R94.36, Absa 2.67% to R168.65, Nedbank 2.42% to R272.50, FirstRand 0.87% to R68.50, and Standard Bank 1.51% to R202.

Among financials, Alexander Forbes added 1.66% to R5.52, Liberty 3.51% to R107.13, MMI 3.59% to R18.49, Coronation 2.46% to R52.39, Discovery 3.42% to R148.98, Sanlam 3.28% to R79.01, and Old Mutual 1.26% to R23.28.

Gold prices fell after the US Federal Reserve said earlier that it was unlikely to raise interest rates again any time soon. This had a deleterious effect on the sector, with the index slumping 3.4%. Sibanye-Stillwater was the biggest loser, down 6.99% to R12.51. It was followed by Harmony Gold, which fell 5.09% to R23.29 and AngloGold Ashanti lost 3.48% to R166.31.

Earlier, Harmony released a production update for the nine-month period ending March 31. The company said an  increase in electricity prices had pushed its costs up from R520,000/kg  to R540,000. It added, however, that it was still on track to meet its production guidance of 1.45-million ounces

Platinum miners relinquished 2.09%, with Lonmin the biggest loser, down 6.16% to R12.19.

General retailers gained 1.3%, with TFG rising 2.29% to R189, Woolworths 1.45% to R48.40, and Mr Price 1.72% to R220.35. The latter made its debut on the A2X exchange, but will maintain its primary listing on the JSE. The retailer joins the likes of Naspers, Standard Bank and Sanlam, who also have secondary listings on A2X.

EOH continued its recovery, jumping 17.24% to R23.94, while Vodacom gained 2.02% to R117.65.

Naspers added 0.98% to R3,690.80.

Property shares were mostly higher, with the index adding 0.34%. Redefine gained 1.02% to R9.95, Fortress A 1.04% to R19.47, and Capital & Counties 1.75% to R46.

At 6pm, the rand had fallen 0.6% to R14.5422/$, 0.48% to R16.2609/€ and 0.45% to R18.9539/£. The euro was 0.13% lower at $1.118.

Gold was down 0.44% to $1,270.98/oz and platinum 1.86% to $851.98.

Brent crude had its biggest drop since Friday, as a result of record production in the US, whose stockpiles rose to 2017 levels. It was last 3.08% lower at $70.42 a barrel.

Absa’s purchase managers’ index (PMI), released earlier in the day, climbed to 2.2 points to 47.2 in April. This indicates continued contraction in the manufacturing sector, with the gauge still below the 50-point neutral mark. Absa attributed the slight increase to a “lack of load-shedding” in April.

Following mixed markets in Asia, European markets were mostly lower, with the FTSE 100 down 0.46% and France’s CAC 40 down 0.85%; Germany’s DAX 30 was flat.

The Dow was 0.86% lower following the US Fed decision, last trading at 26,209.24 points. 

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