Firmer rand pushes retailers and financials higher

Cape Town - Financials and retailers were buoyed by the firmer rand in Monday’s trading session, and ended in positive territory for a second straight session.

This strength in the rand was mainly due to the weaker US dollar, which continued to slide on the back of the miss in non-farm payrolls numbers on Friday. The rand managed to reach highs of $12.68 against the greenback before retracing back slightly to trade at $12.70 to the dollar when the JSE closed.

The JSE All-Share Index managed to close relatively flat and was down 0.04%, with the blue-chip top 40 closing down 0.17%. Financials traded firmer to close up 0.74%, led by Barclays Africa and Standard Bank who were up 2.01% and 1.28% respectively. Retailers rode the wave of the firmer rand, managing to score gains of 2.41% for the day.

Miners were fairly mixed and by the JSE close the Resources Index managed to close 0.57% lower, despite the Gold Index being up 1.00%. Industrials closed 0.27% lower, mainly to the media giant, Naspers, which closed down 0.91%.

News headlines across the globe were dominated by Saudi Arabia and its allies cutting off Qatar, for allegedly supporting terrorist movements in Iran. Brent Crude spiked higher on this news, scoring highs of $50.74 per barrel before stabilising to $49.27 per barrel when the JSE closed.

This retracement was mainly attributed to sentiment which suggested that this diplomatic clash would have limited impact on OPEC’s current policies. Qatari markets tumbled on the back of this news, closing down 7.3% for the day. This latest development puts more risk in global markets which are already riddled with uncertainty amidst global political tensions.

Gold and platinum continued with their upward momentum as safe haven demand has increased on the back of the weaker US dollar, and increased global geopolitical tensions. Gold in particular reached highs of $1283.51 per ounce, and was trading in the green for most of the day’s trading session.

At the close of the JSE, the metal was trading at $1280.95 per ounce. Platinum managed to reach highs of $959.90 per ounce, pushing miners such as Impala Platinum higher on the day. The stock benefitted the most from this surge in platinum prices and was up 3.37% for the day.

Despite the geopolitical tensions in the Gulf, investors are looking ahead to the UK general elections on Thursday.

Pollsters still have Theresa May and the Conservative Party winning the election on their polls, but the US elections have taught us not to rely too much on these polls. With Brexit fully in motion, investors are hoping that the election will provide more clarity on Britain’s future. 

*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.