The good times continue to roll for world equity markets, as the Dow and S&P continued to post solid gains in the US session yesterday. Asian markets were mixed on Thursday as the tech heavy Nikkei and Shanghai CSI 300 eased 0.01% and 0.9% respectively, the Hang Seng and the ASX200 closed the cash session in the black posting gains of 0.26% and 0.38% respectively. The market continues to hold onto the prospects of a FED rate cut next month, however the lack of progress on Sino-US trade war continues to weigh down the new-found market optimism.
The European Central Bank (ECB) President, Mario Draghi indicated that the governing council of the ECB would hold back on a rate hike as the Eurozone’s economy begins to feel the effects of the China-US trade war. The Euro advanced against the dollar after the announcement as carry trade players sought to take positions in the Euro with an anticipation of a widening interest rate differential between the US and the Euro zone within the next month. The ECB appear reluctant to increase rates as peripheral European economies still require additional support to navigate the current depressed economy.
President Ramaphosa on Thursday met with executives from Eskom and South African Airways to reassure the SOE’s of the shareholders support and to help them address their concerns. These meetings are on the back of the resignations of the CEO’s of these two SOE’s. These two SOE’s continue to be the largest dependants of state funding from national treasury and are governments achilles heel in its effort in turning around the economy.
The Rand hedges continued to hold their ground on Thursday as the miners continue to make significant headway. Blue Label Telecommunications Ltd [JSE:BLU] advanced 4.3% on the day to trade at 461c, ArcelorMittal Ltd [JSE:ACL], British American Tobacco [JSE:BTI], and Harmony Gold Ltd [JSE:HAR], advanced 3.77%, 3.51%, 3.12% respectively.
The worst performing shares on the day were Sappi Ltd [JSE:SAP], which eased 7.43% to trade at 5442c at the close of business. Significant losses were recorded by Stadio Holdings Ltd [JSE:SDO], Tongaat Hulett Ltd [JSE:TON], and Rhodes Foods [JSE:RFG], which shed 6.87%, 6.64% and 5.77% respectively.
The JSE All-Share index closed 1.01% firmer whilst the JSE Top-40 index gained 1.04%. The Resource index rallied once more advancing 1.53%, the Industrials were firmer inching up 1.06% whilst the Financials only managed a 0.41% gain.
The $USD continued to weaken against the majors, which gave the commodities some short-term relief. At 17.00 CAT, Palladium was 1.18% firmer to trade at $1342/Oz, Platinum was also firmer adding 0.09% to trade at $803.10/Oz with Gold continuing its winning streak to trade 0.57% firmer to trade at $1340.75/Oz.
Brent crude continued to slide today dipping below the $60/barrel level to trade at $59.97.
The dark cloud hovering over the Rand is not disappearing anytime soon. The local unit continued to weaken against the dollar reaching a session low of 15.00. At 17:00 CAT the Rand was trading at R14.99 against the USD, R16.90 to the Euro and R19.05 to the Pound Sterling.
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