Rand hedges push JSE higher

The JSE closed firmer today as it was buoyed by Rand hedge stocks which jumped on the back of the weaker Rand.

The Rand weakened against the US Dollar, following the trend in other emerging market currencies which also lost some ground relative to the greenback. The local currency weakened to intra-day lows of R13.20 against the US Dollar, and when the JSE closed it was recorded at R13.19/$. This resulted in a positive trading session for most of the Rand hedges with the exception of British American Tobacco (JSE:BTI) which traded under pressure following Friday’s collapse.

Diversified miners Anglo American PLC (JSE:ANG) & BHP Billiton (JSE:BIL) were among the top movers in the JSE Top-40 Index as they closed up 2.97% and 2.88% respectively. Naspers pushed higher closing up 2.04%, whilst luxury goods maker Richemont closed 1.54% firmer. However Steinhoff traded weaker shedding 2.44% to close among the top losers in the Top-40 Index.

The JSE All-Share Index closed up 0.59%, whilst the blue chip Top-40 Index firmed by 0.66%. The Resources Index firmed by 1.78% mainly due to the miners which traded firmer on the back of higher commodity prices and the weaker Rand. The Financials Index weakened by 0.08% and the Industrials Index was 0.42% firmer.

On the commodities front, metals had a positive day thanks to the rise in the price of global iron ore futures overnight. Palladium and Platinum recorded some reasonable gains with the former almost breaking $900 per ounce this afternoon. When the JSE closed Palladium was trading at $894.34 per ounce. Platinum managed an intra-day high of $944.02 per ounce before it was recorded at $937.39 per ounce just after the JSE close.

Despite increasing tensions between the USA & North Korea there wasn’t a big upward move in the Gold price as it traded relatively flat. The metal managed to reach intra-day highs of $1271.23 per ounce which pushed some of the Gold miners on the JSE higher. Stocks such as Gold Fields and AngloGold Ashanti closed up 1.40% and 1.29% respectively. Gold was recorded at $1269.60 per ounce when the JSE closed.

Brent Crude had another positive day following up four consecutive sessions of gains. The commodity reached an intra-day high of $52.92 per barrel, however it slid in the afternoon session to be recorded at $52.28 per barrel just after the JSE closed. OPEC & non-OPEC producers are scheduled to meet in Abu Dhabi next week to discuss why adherence to agreed production cuts has been low amongst the countries. Attempts to increase oil prices through production cuts have been stifled by increased production from US shale gas producers who have increased their production output.