Risk-on trade nudges JSE higher

The JSE closed marginally firmer on Tuesday, as retailers led the gains on a stronger rand, while property stocks also did well.

Risk-on trade was encouraged by a strong opening on the Dow, which had gained more than 1% by the JSE’s close, following in the footsteps of upbeat European markets, which benefited from a weaker euro.

Volumes were low for the second consecutive day, as the market awaited March’s consumer inflation data on Wednesday.

Mining stocks had a negative day on a firmer dollar and a flat Brent crude price, which stabilised at about $71.56 a barrel. The gold index dropped just short of 3%.

Rand hedges were mixed in choppy trade, as Naspers managed to close just above R3,000 a share. British American Tobacco lost ground but Anheuser-Busch InBev and Richemont closed higher.

Steinhoff rocketed 14.78% to R2.33 ahead of its annual general meeting on Friday, after the group shelved a plan to increase executive remuneration.

The all share closed 0.16% higher at 56,826.70 points and the top 40 added 0.11%. Food and drug retailers rose 2.1%, general retailers 0.91%, property 0.83% and financials 0.41%. The gold index shed 2.99%, the platinum index 0.77% and resources 0.06%.

British American Tobacco lost 2.33% to R684.69 and Naspers 1.02% to R3,009.89.

Resilient added 1.38% to R63.85 and Nepi Rockcastle 0.76% to R133.

The rand was at R11.99 to the dollar at the JSE’s close, after earlier reaching R11.96, from a previous close of R12.05. The rand posted its strongest gains against the euro, which came under selling pressure after the release of a downbeat reading on German economic sentiment for April.

Local bonds were slightly firmer, with the R186 last bid at 8.065% from 8.075%. The US 10-year treasury was little changed at 2.8318%.

The bond markets appeared unfazed by some risk-off selling on Monday, with local yields remaining attractive, analysts said. Local bonds have been the best-performing asset class so far in 2018.

The top 40 Alsi futures index added 0.36% to 50,855 points. The number of contracts traded was 17,538 from Monday’s 10,942.