Resurgence in mining stocks sees JSE close firmer

The JSE bucked the trend in other global markets as it closed firmer on Monday, mainly thanks to a rebound in mining stocks.

This was in contrast to the trend recorded in Asia earlier where stocks fell in reaction to the better than expected US jobs data which was released on Friday.

The jobs data has decreased bets on the possibility of a US Fed rate cut given how healthy the US economy is, which in turn decreases the appetite for riskier assets which include stocks. The weaker trend was also recorded for major indices across Europe, as well as the US where stocks opened lower.

The rand had a volatile session which saw it swing between a session high of R14.10/$ and a session low of R14.23/$. At 17.00 CAT, the rand was trading 0.1% firmer at R14.14/$.

ArcelorMittal [JSE:ACL] led gains amongst the miners on Monday as the stock rallied 12.9% to close at R3.15. Gold miner Harmony Gold [JSE:HAR] ended the day 4.5% higher at R32.25, while Gold Fields [JSE:GFI] climbed 3.25% to close at R74.27.

Platinum miner Northam Platinum [JSE:NHM] rose 4.1% to close at R63.50, while Impala Platinum [JSE:IMP] closed at R74.85 after gaining 3.38% mainly on the back of a positive trading statement for the year ended June 30, 2019 in which the company indicated that it was going to report a profit following prior loss making year.

Mining and index giant BHP Group [JSE:BHP] managed to post gains of 1.5% to close at R351.11, while Anglo American PLC [JSE:AGL] inched up 0.54% to close at R380.85. Rand hedge Sappi [JSE:SAP] rose 3.37% to close at R54.55, while EOH Holdings [JSE:EOH] also recorded another robust session to close 2.88% firmer at R24.69.

Blue Label Telecoms [JSE:BLU] struggled significantly as the stock tumbled 13.52% to close at R4.03. Omnia Holdings [JSE:OMN] weakened by 7.19% as it closed at R28.78, while packaging company Nampak [JSE:NPK] fell 4.04% to close at R10.92.

Retailer Mr Price [JSE:MRP] had a subdued session which saw the stock lose 2.74% to close at R189.77, while Shoprite [JSE:SHP] shed 1.05% to close at R154.00. Other significant losses on the day were recorded for Ascendis Health [JSE:ASC] which lost 3.05% to close at R4.77, Motus Holdings [JSE:MTH] which dropped 2.53% to R73.20, and Mondi PLC [JSE:MNP] which closed at R312.77 after dropping 1.65%.

The JSE All-Share index eventually closed 0.21% firmer while the blue-chip JSE Top-40 index also gained 0.21%. The Resources and Financials indices managed to record gains of 1.05% and 0.46% respectively, while the Industrials index shed 0.36%.

Brent crude traded mostly firmer on the day which saw it trading 0.69% firmer at $64.70/barrel just after the JSE close.

At 17.00 CAT, gold was 0.14% weaker at $1 397.18/Oz, platinum was up 1.15% to trade at $819.80/Oz, and palladium was down 0.77% to trade at $1 559.85/Oz.

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* Musa Makoni is a trading specialist at Purple Group.

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