JSE tracks cautious global trade

The JSE closed marginally higher on Tuesday, with retailers and financials leading the way amid cautious trade as global miners and platinum stocks were among those that declined.

Markets adopted a cautious view towards the historic summit between the US and North Korea as the agreements between US President Donald Trump and North Korean leader Kim Jong-un lacked detail.

Volumes traded on the JSE were low for the second consecutive session as the market sought direction from global markets, which traded mostly flat or weaker on the day.

The local market, together with other emerging markets, has been on the back foot for most of May and June as American markets jumped on steady economic growth and betterthan-expected company results.

A possible interest rate hike by the Federal Reserve on Wednesday has added to emerging market woes.

Allocation to US equities climbed 16 percentage points to a net 1% overweight, the first time investors surveyed have gone overweight in 15 months, Bank of America Merrill Lynch said in the latest fund manager survey for May, released on Tuesday.

According to the survey, 64% of respondents think the US has the most favourable outlook for profits, which is a 17-year high. All other regions have net negative profit outlooks.

The all share closed 0.11% up at 58,207.80 points and the top 40 added 0.14%. Food and drug retailers rose 0.96%, financials 0.41% and industrials 0.33%. The platinum index shed 1%, resources 0.66% and property 0.37%.

Anglo American slid 2.07% to R321.59 and BHP 0.42% to R309.50.

British American Tobacco lost 0.41% to R653.73, after issuing a trading update earlier. “The group remains on track for another good year of adjusted constant currency earnings growth,” it said.

The rand weakened to R13.2414 to the dollar from R13.1676 at the JSE’s close following higher-than-expected US consumer inflation data.

Local bonds were weaker, with the benchmark R186 bid at 9.03% from 8.98%. The US 10-year treasury was largely unchanged at 2.963%.

The top 40 Alsi futures index lost 0.09% to 51,931 points.

The number of contracts traded was 25,769 from Monday’s 14,497.