MARKET WRAP: JSE ends higher as miners offset Naspers’s fall

08 July 2019 - 18:33 By karl gernetzky

A solid performance by miners helped lift the JSE a little on Monday amid some caution on global markets, which helped support precious-metal prices.

The major news on the day remained an upbeat US jobs report on Friday, which has led to the market reducing its expectations of future interest-rate cuts.

Asian markets were mostly sharply lower, while trading in Europe remained subdued. Focus this week will be on the release of minutes from the US Federal Reserve’s last policy meeting on Wednesday, as well as Fed chair Jerome Powell’s testimony before congress on the same day.

Earlier, data showed German industrial production rose 0.3% month on month in May, slightly below forecasts. That was helping to support the gold price, Oanda analyst Edward Moya said, although equity trading should be subdued until Powell’s testimony later in the week.

“With peak summer upon Wall Street, markets are likely to see lower volumes until we get to big events,” Moya said.

The rand was faring well by the JSE’s close, trading 0.32% firmer at R14.1435/$, while the Turkish lira recovered a little from recent losses, which followed the removal of that country’s central bank president.

The all share added 0.25% to 57,731.4 points and the top 40 rose 0.21%. Gold miners rose 2.92%, the platinum index 2.76% and resources 1.05%. Industrials fell 0.35%.

Shortly after the JSE closed, the gold price had eased off earlier highs, and was 0.19% weaker at $1,396.98/oz. Platinum had risen 0.95% to $818.08 while Brent crude was 0.43% higher at $64.70 a barrel.

The Dow was down 0.52% to 26,783.3 points, while the tech-heavy Nasdaq had lost 0.82%. In Europe, the FTSE 100 fell 0.14%, the CAC 40 0.22% and the DAX 30 0.33%.

Naspers was down 0.83% to R3,453.

Global tech stocks were under some pressure, amid a trade dispute between Japan and South Korea that had seen the former halt some key technology exports, including semi-conductors. Samsung also warned last week it expected a sharp fall in second-quarter profits, amid headwinds that included the US-China trade war.

There was also some corporate news to give the market direction. A Morgan Stanley analyst wrote a note arguing that  Woolworths shares were undervalued. According to Bloomberg, the analyst raised the price target of the share to R56 from R51. The share gained 4.5% to R48.97.

Impala Platinum leapt 3.38% to R74.85. It said earlier that platinum sales volumes for the year to end-June were expected to increase 12% year on year, while refined platinum production was expected to rise 4%.

Steinhoff lost 3.1% to R1.25 after announcing that its CFO, Philip Dieperink, would step down after the company’s AGM at the end of August. The company also said in the statement its restructuring process was “nearing completion”.

Orion Minerals jumped 26.67% to R38c, a four-month high. It said earlier that it had been granted environmental authorisation for its Prieska zinc-copper project.

Omnia slumped 7.19% to R28.78, extending its almost 12% slide last week. The company is grappling with a heavy debt burden.