Retailers push JSE above 58,000

The JSE pushed higher on Wednesday, closing above 58,000 points for the first time since September 2018, after banks and retailers posted strong gains and the rand pushed past R14/$.

Global markets were mixed and trade rather cautious, but the local currency has found favour since Moody’s Investors Service delivered a somewhat upbeat opinion on SA holding on to its current investment-grade credit rating. Analysts have warned, however, that volatility may pick up ahead of the May 8 general elections.

FEDERAL RESERVE

On Wednesday, emerging-market currencies were boosted by expectations of dovish US Federal Reserve minutes, due later in the day. As the JSE closed the rand was 1.16% firmer at R13.9223/$, the best-performing emerging-market currency.

Gold and platinum miners, however, were under pressure, with Sibanye-Stillwater leading the losses. It closed 17.65% lower at R14 after saying earlier it had raised R1.7bn in a share placement, as it seeks to build capital ahead of what may be a damaging strike at its platinum operations later this year. Analysts warn the move shows some desperation over the miner’s balance sheet, and a larger placement may be in the offing.

Lonmin, which may be acquired by Sibanye, fell 13.94% to R13.46.

The all share rose 0.99% to 58,411.7 points and the top 40 1.16%. General retailers surged 3.47% and food and drug retailers 2.96%. Gold miners slumped 4.45% and platinums 3.35%.

Rand hedge Richemont added a marginal 0.05% to R97.92 after a 3.88% fall on Monday, when Credit Suisse said the share was overvalued, citing a need for the company to pour significant amounts of money into its businesses.

Naspers gained 2.17% to R3,601.66. Mr Price surged 7.42% to R210.86.

FirstRand jumped 4.31% to R67.11 and Nedbank 4.55% to R266.62

Local news was downbeat, with the SA Chamber of Commerce and Industry (Sacci) business confidence index falling 1.6 points in March compared to February.

BUSINESS CLIMATE

Sacci said there are some positive short-term business climate indicators, due in part to the government’s efforts to grow the economy, but this does not overshadow the challenges faced in terms of increases in the prices of fuel and electricity, and loadshedding.

Shortly after the JSE closed, the Dow was flat at 26,126.41 points. In Europe, the FTSE 100 was also flat, while the CAC 40 had added 0.26% and the DAX 30 0.53%.

At the same time gold was up 0.26% to $1,307.32/oz and platinum 1.49% to $901.50. Brent crude had gained 0.44% to $71.10 a barrel.