JSE strengthens as resources rise

The JSE all share closed firmer on Thursday as resources gained on higher oil prices, and despite a rangebound rand.

Brent crude rose as refinery operations remained shut in Houston after Tropical Storm Harvey hit the Texas coastline for a second time, also causing heavy rain across Louisiana.

After showing little movement so far in the week, following the Texas floods, Brent crude was up 2.88%, to $52.31 a barrel at the JSE’s close. The higher oil price boosted other commodities while the dollar, unchanged at $1.1877/€, supported gold, which rose 0.55%, to $1,315.44 an ounce.

The all share closed 0.63% higher at 56,522.10 points and the blue-chip top 40 added 0.65%. Resources rose 1.18%, food and drug retailers 0.88%, industrials 0.58%, gold 0.43% and property 0.36%. But banks shed 0.16% and the platinum index retreated 0.57%, even though the metal’s price advanced 0.21%, to $992.91.

Anglo American gained 2.60%, to R235.06 and BHP 0.65%, to R246.95.

Sasol closed the day 1.91% higher at R391.88. Naspers closed 0.5% higher at R2,940.97.

The rand was largely unchanged at R13.0121 to the dollar, from R12.9994, trading between R12.98 and R13.08.

Local bonds were marginally firmer, with the R186 bid at 8.565%, from 8.585% as US bonds firmed in choppy trade following mixed data released on the day. ADP employment was better than expected, boding well for Friday’s nonfarm payroll data.

But US core inflation came in at an annual 1.4% in July, the lowest level since December 2015. As recently as February, the annual inflation rate was 2.2%, while core prices were up 1.9% from a year earlier.

The December meeting of the US Federal Reserve might well pass with rates unchanged and expectations of future increases much lower, said Oanda analyst Craig Erlam.

The top-40 Alsi futures index rose 0.55% at 49,746 points. The number of contracts traded was 20,523, from Wednesday’s 21,231.