JSE rallies with global peers as rand dives
As the rand took its deepest dive in more than a fortnight, the JSE tracked global peers higher on Thursday when US corporate giant Nvidia’s strong corporate results boosted sentiment.
Nvidia, which is the fifth-largest US company by market capitalisation, said that total revenue rose 265% from a year ago, driven by its booming artificial intelligence (AI) business.
The company forecast another strong revenue gain this quarter.
AI enthusiasm powered the jawdropping rally in Nvidia, and other big tech names in the past year.
Bloomberg reports that the chipmaker’s blowout quarter may further boost the confidence that has benefited the broader market.
The JSE all share rose 1.48% to 74,112 points, pushed up by all major indices except food producers, which lost 1.44%. The top 40 was up 1.62%.
At 5.25pm, the Dow Jones industrial average was 0.68% firmer at 38,873 points, with markets also firmer in Europe. Meanwhile, minutes from the most recent US Federal Reserve open market committee meeting released on Wednesday showed that US central bank officials remained cautious about lowering interest rates too quickly, and emphasised the importance of assessing incoming data carefully in judging whether inflation was moving down sustainably to 2%.
Retailer Pick n Pay led the losses on the local bourse, with the company’s share price having its biggest drop in at least 25 years after it revealing its dire financial problems, which have forced it to embark on a rights issue to raise as much as R4bn to stabilise the company.
In a statement on Thursday, the company said that it would also be unbundling its Boxer discount chain to help recapitalise the business, but would retain a majority stake in its star performer. The company’s share price fell 16.02% to R21.71.
The SA currency had its biggest fall in more than two weeks, when it sank to an intraday worst of R19.1625/$. That was its weakest level in more than a week.
At 5.32pm, the rand had weakened 1.26% to R19.1429/$, 1.16% to R20.6901/€ and 1.31% to R24.1717/£.
The euro, however, was little changed at $1.0816.
“We have seen the dollar steadily clawing back strength since the lows of this morning and against a broad basket of currencies,” said IG senior market analyst Shaun Murison.
“Reasons for the move aren’t entirely clear,” he said. “We did, however, have hawkish minutes released from the Fed’s last meeting.
“Rand weakness, while perhaps slightly exaggerated, is not isolated as a number of emerging-market currencies are also softer on the day as well. Key export prices, while mixed, mostly traded off highs of the day as well,” said Murison.