MARKET WRAP: JSE nears four-month highs as volumes dwindle

19 December 2019 - 20:27 By Lindiwe Tsobo
Picture: JSE
Picture: JSE

The JSE declined for the first time in seven days on Thursday, staying near its strongest levels in four months based on closing prices, as volumes declined ahead of the festive break.

European markets, which earlier in the week hit records amid optimism that the US and China would strike a trade deal, were mixed on Thursday.

The FTSE 100, which has been on the back foot after UK prime minister Boris Johnson vowed to block an extension that would keep the country in the EU beyond 2020, ended in positive territory as multinational companies were boosted by a weaker pound.

The Bank of England on Thursday kept interest rates on hold at 0.75% but indicated it may cut if global economic growth fails to recover or concern about the prospect of a disorderly Brexit persist. The bank’s monetary policy committee voted 7-2 in favour of keeping the official rate on hold. Lower rates would reduce the appeal of holding UK assets.

In the US, investors hardly reacted to the impeachment judgment against US President Donald Trump by the House of Representatives because it is widely expected that the Republican-controlled Senate will not vote to remove him from office.

“The Trump impeachment saga may write some great headlines and put the president in an unenviable group of three that have gone through a similar process, but as far as markets are concerned, it’s nothing more than a sideshow,” said Oanda senior market analyst Craig Erlam.

The rand was a little weaker on Thursday, with analysts noting that the local currency is trading resiliently, despite Fitch Ratings maintaining its negative credit rating on the country and casting doubts on the government’s ability to deal with low growth, rising government debt and ailing state-owned entities (SOEs).

SA’s currency has ridden a wave of optimism on global markets this week, erasing  its declines for 2019, despite a downbeat outlook for the local economy.

The JSE all share lost 0.36% to 57,558.9 points, after recent gains that pushed it to its best close since the middle of September. The top 40 also lost 0.38%. Industrials were flat while banks lost 1.05%, financials 0.97% and the platinum index 3.54%.

Gold was up 0.1% to $1,476.87/oz while platinum lost 0.25% to $934.08/oz. Brent crude was up 0.74% to $66.66 a barrel.

Diversified miner Glencore added 1.1% to hit R44.32.

AngloGold Ashanti gained 3.3% to R288.48, having said earlier that its Obuasi mine in Ghana had restarted production.