Local JSE equities reverse earlier losses to close firmer
The JSE reversed earlier losses from the morning session to close in positive territory for the day. This was in contrast to the trend that we saw earlier on in the Asian markets where most of the major indices closed in the red.
Locally, StatsSA released CPI data which was generally in line with forecasts. CPI year-on-year was recorded at 5.4% as forecasted, whilst the month-on-month number was recorded at 0.3% which was just slightly higher than the forecast of 0.2%. The year-on-year number is below the South African Reserve Bank’s upper inflation target of 6% and given this latest CPI figure we might start to see more speculation of a possible rate cut.
The Rand was caught again in volatile trade as the US Dollar lost some ground in today’s trading. The local currency weakened to lows of R13.13 against the greenback before strengthening again to reach highs of R13.02/$. At the close, the USD/ZAR was recorded at R13.06/$. The US Dollar weakened against a basket of major currency pairs mainly on the back of the strength in the British pound. The British Pound strengthened after the Bank of England’s chief economist, Andy Haldane, said he was considering voting for an interest rate hike because the risks of leaving monetary policy tightening too late were rising.
The JSE eventually closed higher, with the JSE All-Share index closing 0.47% firmer, whilst the blue chip Top-40 index was 0.54% firmer. Resources rebounded managing to close the day up 1.05%, whilst the Financials index did end up closing firmer, gaining 0.09%. The Industrials index also managed to close the day on a positive note, closing the day 0.48% firmer.
Gold was also volatile in today’s session managing to score highs of $1247.91 per ounce before retracing back to trade at $1245.97 per ounce when the JSE closed. Gold miners on the JSE traded in the green on the back of this move in the metal with Goldfields and AngloGold Ashanti closing up 3.10% & 2.20% respectively. Platinum was however mostly flat as it failed to gain considerable momentum after strengthening in early morning trading. The metal reached lows of $917.17 per ounce before recovering and trading at $922.17 per ounce when the JSE closed.
Brent Crude found some relief in today’s session as a statement from the Iran energy minister and US crude inventories managed to propel the commodity higher. US Crude Oil Inventories indicated a draw of 2.45 million barrels which was higher than the anticipated draw of 1.01 million barrels. The Iran energy minister said that OPEC may decide to make deeper output cuts in order to push prices higher. There is still strong evidence of an oil glut as global stockpiles still remain relatively high as indicated by an increase in offshore storage stockpiles. The commodity managed to reach highs of $43.63 just after the US stockpiles were released and was trading in the green for the greater part of the day. Brent Crude did come off after that initial move and it was trading at $45.82 per barrel after the JSE closed.