JSE on high note in global risk-on trade

The JSE all-share started the week on a positive note yesterday as global equity markets powered ahead in riskon trade, after US treasuries and EU bond yields touched the year’s lows last week.

Risk aversion is when investors switch out of instruments such as equities into cash and bonds, with risk-on indicating the opposite.

Equity markets shrugged off the safe-haven trade in global bonds markets, recording gains in a relief rally following the easing of tension in North Korea, and indications that Tropical Storm Irma was not as destructive as previously thought, after hitting Florida at the weekend.

Platinums were the main loser on the steady rand as the platinum price dropped below $1 000 an ounce.

Traditional safe-haven assets, such as gold and the yen, took a breather, with local banks losing ground after Moody’s maintained its negative outlook on the sector.

The all-share was supported by Naspers jumping more than 3%, on reputed undervalued sentiment. Its investment in China’s Tencent, of which it owns 33%, earlier rose 2.8% in Hong Kong.

Naspers ended 3.1% higher at R2 952.65.

The all-share closed 0.51% higher at 56 008.8 points and the blue-chip Top 40 0.72%.

Industrials gained 0.89%, resources 0.29% and property 0.06%. Platinum stocks shed 3.64%, the gold index 3.5%, general retailers 0.82% and banks 0.19%.

The rand showed little reaction to Finance Minister Malusi Gigaba’s warning that growth was at risk of falling short of previous forecasts.