JSE closes firmer on positive vibe

The JSE closed firmer on Tuesday as general retailers, banks and financials gained on positive sentiment, even though economic growth is expected to be subdued over the short term.

Volumes amounted to R21bn at the close as risk-on sentiment dominated after the Dow hit a new record earlier in the week.

The IMF expects economic growth in SA to remain below 1%, putting it at 0.9% for 2018 and 2019.

However, a report by Goldman Sachs saying SA could be the emerging-market story of 2018 has buoyed sentiment, despite the rand weakening marginally on the day due to a lack of developments on the political front.

Rand hedges were generally higher, driven by Naspers, but global miners were lower after a comeback in the rand at the close and amid flat commodity prices.

The all share closed 0.68% higher at 61,475.40 and the blue-chip top 40 gained 0.66%. Banks rose 2.49%, general retailers 2.47%, food and drug retailers 2.14%, financials 1.78%, industrials 1.16% and property 1.05%. Resources dropped 1.75%, platinum 1.33%, and gold 0.29%.

Diversified miner Anglo American dropped 3.22% to R291.22 and Glencore 3.16% to R66.10. Kumba Iron Ore fell 4.38% to R358, Assore 4.87% to R371.96 and Exxaro 5.2% to R148.99.

Rand hedge Anheuser-Busch In Bev fell 1.19% to R1,380, while Richemont gained 0.98% to R112.95.

After weakening to R12.16 to the dollar from R12.0545, the rand regained some momentum towards the close, firming to R12.1097 after the euro regained ground against the greenback ahead of Thursday’s European Central Bank meeting. The bank is expected to hint at a hawkish stance on interest rates at the meeting.

A deal in the US Senate that ended, at least temporarily, a three-day government shutdown lifted the dollar, capping further gains in the rand after it flirted with breaking through R12 to the dollar on Monday.

Local bonds were steady. The R186 was unchanged at 8.38% as the market followed the rand on the day.

The US 10-year treasury was last seen at 2.6172%, from 2.6495%.

The top 40 Alsi futures index gained 0.63% to 54‚938 points. The number of contracts traded was 14‚468, from Monday’s 13‚889.