Higher platinum and mining shares help boost JSE

Johannesburg-S.A. (Apr 20)  JSE closed firmer on Wednesday as higher platinum and mining shares buoyed overall market sentiment.

Banks and financials recovered and industrials came back from lower levels on the day.

The resource index rallied to its best level since November, boosted by shares such as Anglo American, which responded to higher metal prices. The platinum index was at its highest this year.

At the close, gold had firmed 0.24% to $1,252.95 an ounce. The platinum price was 1.22% higher at $1,024.41.

Brent crude was 1.62% lower at $43.805 a barrel in the late afternoon after US home-sales data pointed to recovery in the housing market, boosting the dollar, but causing oil prices to slip.

However, Brent crude oil was last seen 1.08% firmer at $43.305 a barrel after workers in Kuwait called off a three-day strike.

Investors looked ahead to Thursday’s European Central Bank (ECB) meeting. The ECB was not expected to take new policy action at the meeting, but analysts said there was a risk the central bank could signal more caution on the economy.

At 5pm, the all share closed 0.77% higher at 53,789.80 and the blue-chip top 40 rose 0.52%.

The platinum index rocketed 9.56% and resources firmed 3.39%. The gold index was 3.25% stronger. General retailers rose 2.32%. Banks added 1.84% and financials rose 0.97%. Industrials shed 0.25%.

The Dow Jones industrial average was 0.12% up at the JSE’s close, but softened later. The FTSE 100 lost 0.29%, but the Paris CAC 40 gained 0.14%. The DAX was 0.18% higher.

Alwyn van der Merwe, the investment director at Sanlam Private Wealth, said global equity markets remained uncertain about certain key future developments, such as a possible downturn in China and interest rate increases in the US. "This requires a cautious approach. Now was not the time to take big risks in portfolios."

The market is edgy about a possible downgrade later in the year and the possible consequences for investors. "However, a downgrade could already largely be priced-in."

Among individual shares on the JSE, Anglo American jumped 8.19% to R163.50 and BHP Billiton (BIL) added 3.40% to R203.87. Kumba Iron Ore was 7.89% up at R110.93.

The rand was firmer against the dollar in late trade, despite expectations that it could weaken on news of slightly better-than-expected local consumer price index (CPI) data.

CPI decelerated to 6.3% in March from 7% in February, beating expectations of 6.6% from a poll of economists.

However, economists expect inflation to reach 8% later in the year on higher food prices making further interest rate increases probable.

At 5.44pm, the rand was at R14.2120 from a previous close of R14.2724. The rand firmed to its best level for 2016 at R14.1621 to the dollar in intraday trade.

Bonds were slightly softer after the release of the better-than-expected inflation figures for March. At 3.30pm the benchmark R186 bond was bid at 8.940% and offered at 8.920% from Tuesday’s close of 8.860%.

Meanwhile in the US, the 10-year Treasury bond yield dipped, responding to lower oil prices and muted equity moves, but it was having trouble sustaining any rally, Dow Jones Newswires reported.

With only existing home sales on the economic calendar and no US Federal Reserve officials expected to speak on Wednesday, bonds could struggle to find a direction. The 10-year yield was last seen at 1.7766% from 1.7853% on Tuesday.

South African futures were firmer, taking their cue from a stronger local bourse.

At 5.48pm CAT, the local near-dated Alsi futures market was 0.64% firmer at 47,898 points. A total of 35,070 contracts traded from 19,550 contracts previously.

Source: BDlive