JSE extends gains as rand continues to strengthen

Cape Town - After a slow start, the JSE managed to gain momentum in the afternoon to close the day firmer.

The rand continued to gain against the greenback, as the US dollar remained under pressure against a basket of major currency pairs. The rand managed to reach intra-day highs of R12.91 against the US dollar, and when the JSE closed it was trading at R12.93/$.

The weakness in the US dollar set the tone for strength in gold prices, however gold miners on the JSE traded under pressure despite this reprieve. AngloGold Ashanti was one of the top losers in the Top-40 Index dropping 1.51%%, whilst Gold Fields eventually managed to close up 0.82%. Retail and financials stocks benefitted from the firmer rand which saw stocks such as Truworths and Standard Bank closing up 2.11% & 1.37%.

The JSE All-Share Index closed up 0.43%, whilst the blue chip Top-40 Index closed up 0.40%. The Resources Index firmed by 0.37% on the back of slightly stronger commodity prices. The Financials Index recorded gains of 0.69%, and the Industrials Index managed to close up 0.34%.

In terms of economic data, China released a positive set of data in the early hours of this morning. Investors were eagerly awaiting the GDP year-on-year data which came in better than expected at 6.9%, versus an expectation of 6.8%. Retail Sales and Industrial Production numbers year-on-year also beat estimates. This will inspire most commodity based emerging market economies whose growth has been stunted by China’s slower consumption of raw materials.

Locally, Massmart released a sales update which indicated a marginal increase of 0.5% for the 26 week period recorded. Comparable store sales decreased by 1.6% and they are estimating product inflation to be 3.2%. Nonetheless, Massmart managed to close firmer on the day at R105.94 per share, up 0.63%.

On the commodities front, Brent Crude was trading flat in a rather quiet day for energy commodities. It managed to reach intra-day highs of $49.26 per barrel and when the JSE closed it was trading at $49.01 per barrel.

Metals had a positive day with Gold in particular managing to reach an intra-day high of $1236.10 per ounce. This was mainly due to US dollar weakness, and when the JSE closed it was trading at $1233.55 per ounce. Platinum and Palladium also managed to record gains managing to reach intra-day highs of $934.43 and $868.14 per ounce, before being recorded at $929.92 & $867.79 per ounce respectively, when the JSE closed.

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