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Markets struggle for direction despite improved Chinese GDP data

Musa Makoni

Global stocks traded mostly flat on Wednesday despite better than expected Chinese economic data.

China’s GDP QoY was recorded at 6.4% which was better than the forecasted growth of 6.3%. Industrial Production YoY expanded 8.5% easily beating estimates of 5.6%, while Retail Sales YoY grew by 8.7% from a prior recording of 8.2%. Despite this data Asian markets remained unchanged as the Hang Seng closed 0.02% weaker while the Shanghai Composite Index added 0.04%. The trend was similar in Europe where stocks also struggled to find a catalyst for significant direction. In the USA, relatively muted earnings releases saw the S&P500 and Dow Jones futures drift for most of the day’s session.

The US dollar also struggled for direction as it traded in a relatively narrow range. This did well for the rand which advanced to a session high of R13.92/$ before retracing to trade 0.39% firmer at R13.96/$.

On the JSE, Mediclinic [JSE:MEI] rose 5.53% to end the day at R59.52 mainly on the back of the release of its full-year results which showed an increase in revenue and a decline in earnings per share. Massmart [JSE:MSM] was also buoyant on the back of the release of its quarterly sales update which indicated that sales had increased by 5.8% YoY over the period. The stock closed 6.39% higher at R85.80. Clicks [JSE:CLS] released an impressive set of half-year results which indicated a healthy increase in headline earnings per shares and group turnover. The stock gained 3.99% to close at R184.07. EOH Holdings [JSE:EOH] had another standout day as the stock rose as high as R26.60 before retracing to close 12.98% higher at R22.80. Other significant gains on the day were recorded for Lonmin PLC [JSE:LON] which gained 7.15% to close at R13.49, as well as Sibanye Stillwater [JSE:SGL] which closed at R14.40 after gaining 6.59%.

17 April (1)

Sappi [JSE:SAP] came under pressure as it shed 5.51% to close at R65.79, while fellow rand hedge Mondi Ltd [JSE:MND] fell 4.71% to close at R311.42. Miners struggled significantly on the day as they tracked mostly lower. BHP Group [JSE:BHP] fell 3.03% to close at R339.48, Kumba Iron Ore [JSE:KIO] retreated 4.94% to close at R452.46, and AngloGold Ashanti [JSE:ANG] lost 3.23% to close at R180.36. Anglo American PLC [JSE:AGL] dropped 1.37% to close at R393.53, while Exxaro Resources [JSE:EXX] lost 1.32% to end the day at R168.50.

The JSE All-Share index closed flat after only managing to add 0.01%, while the JSE Top-40 index shed 0.05%. The Resources index fell 2.23%, however the Industrials and Financials indices gained 0.85% and 0.56% respectively.

At 17.00 CAT, Platinum was up 0.825 at $888.50/Oz, Gold had gained 0.24% to trade at $1273.78/Oz, and Palladium was up 2.42% to trade at $1387.25/Oz.

Brent crude advanced marginally following a retracement in the prior session. The commodity was trading 0.22% weaker at $71.57/barrel just after the JSE close.