JSE starts month with broad gains
The JSE rose a healthy 2% on Thursday, starting November on a positive note, once again given the bulk of its direction from heavyweight Naspers.
Naspers jumped 8.56% to R2,814.72, given a fillip by news it will not be penalised in global index rankings for its dual-share structure, and by a recovery in global tech stocks.
The all share rose 2.27% to 53,578.8 points and the top 40 advanced 2.42%. Industrials rose 3.55%, banks 2.08%, food and drug retailers 1.96%, and general retailers 1.9%.
Gold miners gave up 2.09%.
A 2% gain by the rand to the dollar assisted retailers and banks, but gold miners fell despite a stronger precious metal price, largely due to a 9.67% slump by Sibanye-Stillwater to R9.25.
The company earlier reported steep drops in production for the quarter to end-September, as well as spiralling costs.
Good news for shares sensitive to interest rates came in the form of further moderation in the oil price, with Brent crude falling below $75 on concerns of both rising supply and slowing global economic growth.
Local news was mixed with the Absa purchasing managers index earlier printing at 42.4 points in October from September’s upwardly revised 44.5 points.
BUSINESS CONDITIONS
New-vehicle sales, however, grew 1.7% in October versus the same month in 2017, with the National Automobile Association of SA (Naamsa) noting that vehicle cost inflation is below consumer inflation.
Recent economic data indicates that business conditions should remain difficult in the short term, Naamsa said.
October was a tough month for equities, with the MSCI world index falling 7.5%, the most in six years.
The rand and local stocks also came under some pressure after the medium-term budget policy statement, which has been seen as creditnegative. Despite the poor financial standing of some of SA’s key parastatals continuing to pose a risk to the government’s debt trajectory, ratings agencies are likely to continue to give SA the benefit of the doubt for now, said Momentum Investments economist Sanisha Packirisamy.
Diversified miner Glencore gained 2.45% to R61.80 and BHP added 2.05% to R302.95.
Gold Fields rose 0.79% to R39.50, amid news that it is facing a strike at its struggling South Deep mine, which is looking at restructuring and lay-offs.
Shortly after the JSE closed the Dow was up 0.72% to 25,296.43 points. The FTSE 100 and DAX 30 were flat, while the CAC 40 had given up 0.36%. At the same time platinum had firmed 2.4% to $858.57 an ounce and gold 1.45% to $1,231.94. Brent crude was flat at $74.55 a barrel.