Stocks rally once again on trade war optimism

The JSE began the week on a positive note as it surged along with other global markets after Donald Trump agreed to ease a ban on US companies which trade with Huawei.

The major US indices quickly surged to new all-time highs led by gains in tech stocks on the Nasdaq. In Hong Kong markets were closed while in mainland China the Shanghai Composite Index rallied to close 2.88% higher, and in Japan the Nikkei gained 2.13%.

It also was a sea of green in Europe as all the major indices advanced. This move from the US president has been taken as a positive move in potentially lowering tensions between the US and China.

On the currency market the rand had a volatile session which saw strengthen as high as R14.03/$ earlier, before it fell to a session low of R14.17/$. At 17:00 the rand was trading flat at $14.07/$.

On the JSE, blue-chips traded mostly firmer with significant gains being recorded for Aspen Pharmacare [JSE:APN] which rallied 4.18% to close at R104.65. British American Tobacco [JSE:BTI] rose 3.19% to end the day at R510.26, Naspers [JSE:NPN] climbed 2.92% to close at R3519.20, and Mediclinic [JSE:MEI] posted gains of 4.13% to close at R56.70. Nampak [JSE:NPK] closed as one of the day’s biggest advancers after it gained 7.32% to close at R11.00, while Blue Label Telecoms [JSE:BLU] rose 5.1% to R4.95.

Retailers remained resilient despite the slip up in the rand with stocks such as Truworths [JSE:TRU] adding 3.57% to close at R72.50, while Massmart [JSE:MSM] closed at R62.97 after gaining 1.24%.

Gold stocks retreated on the day mainly on the back of the weaker gold metal price. AngloGold Ashanti [JSE:ANG] was one of the day's biggest losers as it tumbled 6.78%  to close at R236.79. Sibanye Stillwater [JSE:SGL] fell 5.13% to R15.90, Harmony Gold [JSE:HAR] dropped 3.88% to close at R30.51, and Gold Fields [JSE:GFI] lost 4.63% to close at R73.20.

Other significant losers on the day included Life Healthcare [JSE:LHC] which dropped 2.85% to close at R21.80, Imperial Logistics [JSE:IPL] which lost 1.77% to close at R50.52, while Sappi [JSE:SAP] lost 1.77% to close at R53.92.

After having advanced more than a percent earlier the JSE All-Share index eventually closed 0.61% firmer, while the blue-chip JSE Top-40 index gained 0.51%. Gold stocks weighed on the resources index as it lost 0.41%, however the industrials and financials indices gained 1.15% and 0.13% respectively.

Brent crude advanced as OPEC pledged to continue output cuts well into the following year. Brent crude was trading 1.65% firmer at $65.80/barrel just after the JSE close.

At 17:00, gold was down 1.04% at $1394.90/Oz, platinum was 0.4% firmer at $838.70/Oz, and palladium was up 1.12% to trade at $1555.70/Oz.

*Musa Makoni is a trading specialist at Purple Group

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