Banks lead late rebound on JSE

Good news finally managed to lift the JSE shortly before its close on Wednesday, with banks rebounding the most, following a choppy day of trade.

Banks, financial stocks and most retailers were weaker for much of the day, despite supportive economic data releases. Corporate news was mixed, with a release by diversified miner BHP bolstering the resources index, while a statement from Shoprite weighed on food and drug retailers.

The all share firmed 0.22% to 56,237.2 points, and the top 40 0.35%. Resources gained 0.73% and banks 0.44%. Platinums fell 1.36%, gold miners 1.35% and food and drug retailers 1.36%.

Earlier, inflation for June came in at 4.6% year on year, and while this was an acceleration from May’s 4.4%, it was less than the 4.8% consensus expectation. Retail sales for May were also upbeat, growing 1.9% year on year, compared with the consensus forecast of 0.8%. While most analysts said this was positive, FNB senior economist Jason Muscat said the print suggested consumers were reining in spending, probably to divert cash to rising fuel costs.

Retailer Shoprite fell 3.73% to R212.30, after earlier reporting that turnover in its non-SA operations fell 7% in the year to end-June, largely due to hyperinflation in Angola.

Clicks added 2.55% to R190.55. Trading ex-dividend, TFG fell 2.32% to R160. Diversified miner BHP gained 1.51% to R287.92, having earlier pleased the market with its operational review for the year to end-June. Nedbank gained 1.44% to R261.14 and Absa 1.08% to R159.71. Vodacom gained 3.61% to R129.84.

Global markets were cautious, watching US corporate earnings reports and US Federal Reserve chairman Jerome Powell’s testimony before legislators.

Shortly after the JSE closed, the Dow was up 0.18% to 25,166.51 points, while in Europe the DAX 30 had gained 0.73%, the FTSE 100 0.61% and the CAC 40 0.4%.

At the same time, platinum had fallen 0.55% to $812.33 an ounce and gold 0.1% to $1,226.40. Brent crude was 0.17% higher at $71.70 a barrel.

The top 40 Alsi futures index gained 0.14% to 50,170 points. The number of contracts traded was 19,141 from Tuesday’s 29,025.