JSE closes firmer as banks and financials gain before US election outcome

The JSE ended stronger yesterday‚ while global markets were trading cautiously as US voters went to the polls to elect a new president.

Commerzbank analysts rated Democratic Party presidential candidate Hillary Clinton as the market’s preferred winner, because she meant “business as usual”. A win for Republican Donald Trump was a risk scenario‚ causing investors to buy safe-haven assets‚ they said.

On Monday‚ global market sentiment rose on the perception that a Clinton victory was less likely to create market volatility.

Momentum SP Reid Securities analysts said the upward momentum in markets was likely to wane slightly as the US election progressed.

Policy inconsistency associated with a Trump win would almost certainly create a sell-off of between 4% and 7% of riskier US assets, they said. That would drive the S&P 500 below its 200-day moving average.

The JSE all-share closed 0.79% firmer at 50 700.7 points and the Top 40 index lifted 0.81%.

The banking and financial indices gained the most‚ adding 3.33% and 1.92% respectively‚ as a firmer rand environment provided support.

Gold miners fell 1.62% as investors sold off safe-haven assets and returned to riskier assets.

Among individual shares‚ BHP Billiton closed 1.57% firmer at R206.00 and Sasol added 1.25% to R371.73‚ despite lower oil prices.

ArcelorMittal fell 4.17% to R11.50 after saying its flat steel production from its South African operations had fallen 21%.

Financial service Sanlam gained 3.1% to R65.53. – BusinessLive