Equity markets gain in relief rally

The JSE all share started the week on a positive note, as global equity markets powered ahead in risk-on trade, after US treasuries and EU bond yields touched 2017 lows last week.

Equity markets shrugged off the safe-haven trade in global bond 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.

The gold price was at $1,334.40 an ounce, from $1,346, and the dollar at ¥108.89, from ¥108.21.

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 on the day, with domestic 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, despite trading at a price-to-earnings ratio of 110. Its investment in China’s Tencent, of which it owns 33%, earlier rose 2.8% in Hong Kong trade.

The all share closed 0.51% higher at 56,008.80 points and the blue-chip top 40 rose 0.72%. Industrials gained 0.89%, resources 0.29% and property 0.06%. Platinums shed 3.64%, the gold index 3.5%, general retailers 0.82% and banks 0.19%. Naspers ended the day 3.1% higher at R2,952.65. Barclays Africa lost 1.06%, to R140.50, Capitec 1.29%, to R900.32 and Nedbank 0.22%, to R205. AngloGold Ashanti slid 5.62%, to R129.89.

The rand was at R12.9326 to the dollar soon after the JSE’s close, from R12.9651, as it showed little reaction to Finance Minister Malusi Gigaba’s earlier warning that growth was at risk of falling short of previous forecasts. A revised outlook could be announced during the medium-term budget policy statement on October 25.

Domestic bonds remained weaker, with the yield on the R186 at 8.445%, from 8.38%.

The top-40 Alsi futures index gained 0.8%, to 49‚561 points.