JSE firmer as SA inflation slows

The JSE advanced on Wednesday primarily on the back of solid gains on the financials index which were bolstered by the firmer rand.

Global sentiment was also improved ahead of the release of the US Fed’s FOMC meeting minutes from its last policy meeting. The minutes are scheduled to be released at 20.00 CAT. In the USA, better than expected earnings numbers from retail giants Target Corp and Lowe’s also helped lift US equity futures higher, and subsequently we saw the spot market open firmer as well.

Locally, Statistics SA released South Africa’s inflation data for the month of July. CPI YoY slowed down to 4% from a prior recording of 4.5%, while CPI MoM was unchanged from the prior recording of 0.4%. On the back of this data and a relatively flat US currency, the rand advanced against the greenback as it reached a session high of R15.15/$ before it retraced to trade 0.77% firmer at R15.23/$ at 17.00 CAT.

On the JSE, Steinhoff International [JSE:SNH] climbed back above R1 to a session high of R1.16 before it settled 21.28% higher at R1.14. KAP Industrial Holdings [JSE:KAP] also surged on the day eventually closing 11.45% higher at R5.45, while Brait [JSE:BAT] gained 7.39% to close at R15.40. Pharma giant Aspen Pharmacare [JSE:APN] added 6.95% to close at R69.52, while oil and gas producer Sasol [JSE:SOL] managed to post gains of 3.32% to close at R280.64.

Financials advanced on the day which saw gains being recorded for Nedbank [JSE:NED] which gained 2.42% to close at R224.75, ABSA Group [JSE:ABG] which added 2.5% to close at R153.08, as well as FirstRand [JSE:FSR] which rose 2.25% to end the day at R59.61.

Weaker iron ore prices saw resulted in a lower appetite for Kumba Iron Ore [JSE:KIO] which fell 4.69% to close at R397.91, while index giant BHP Group [JSE:BHP] lost further ground as it slipped 2.21% to close at R316.16. Intu Properties [JSE:ITU] had a tough outing as it fell 3.23% to close at R6.29, while its sector peer Arrowhead Properties [JSE:AWA] lost 1.28% to close at R3.08.

The negative sentiment continued to weigh on some of the retailers as losses were recorded for Massmart [JSE:MSM] which lost 2.77% to close at R42.49, as well as Shoprite [JSE:SHP] which dropped 1.35% to close at R125.15. Other significant losses on the day were recorded for Exxaro Resources [JSE:EXX] which lost 2.03% to close at R134.46, MTN Group [JSE:MTN] which lost 1.56% to close at R102.55, and Anglo American PLC [JSE:AGL] which dropped 1.43% to close at R317.65.

The JSE Top-40 index closed 0.52% higher while the JSE All-Share index added 0.57%. The Resources index was the only major index to close softer as it shed 0.49%. The Financials and Industrials indices managed to add 1.66% and 0.8% respectively.

At 17.00 CAT, Palladium was down 1.21% to trade at $1473.35/Oz, Gold had shed 0.24% to trade at $1503.81/Oz, and Platinum was 0.29% firmer at $852.00/Oz.

Brent crude was buoyed by an increase in US crude inventories as indicated by stockpiles data released on Wednesday. The commodity was trading 1.18% firmer at $60.72/barrel just after the JSE close.

21 August

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