International markets positive following French election

Cape Town – The JSE caught the wave of positive movements extending across international markets after the French election outcome followed the predicted polls.  

The result saw Euro stocks headed for their best day in almost two years, after the market's favoured candidate won the first round of the French election, reducing the risk of another Brexit-like shock.

News that Emmanuel Macron and Marine Le Pen are advancing to a presidential runoff allowed markets to breathe a sigh of relief. The polls widely predict a victory for the pro-European Union Macron, at the next vote scheduled for May 7. Many market observers had worried that Le Pen, much like US President Donald Trump, could wind up defying the odds and win in France.
 
At the close of the JSE, the Euro had soared to $1.0861 against the dollar, hitting a five-month high, while the French CAC 40 rose 4.15%.  The rand had strengthened to a three-week high closing price of R12.98 against the dollar.  

The JSE blue-chip Top 40 closed 1.35 up, followed by the All Share Index which climbed 1.24%. The positive rand boosted retailers and financials, with the Banking Index climbing 2.21%, and the broader Financial Index climbing 1.94%. The Industrial Index firmed 1.54%, whilst the Resources Index dropped 0.16%.

A stronger rand combined with a weaker gold price saw local gold miners eat dirt, with the gold index flopping -6.13%.  The weakness was led by GoldFields [JSE:GFI] dropping 6.54% followed by Sibanye [JSE:SGL] -6.01%, AngloGold Ashanti [JSE:ANG] -5.03%, and Harmony Gold [JSE:HAR] -3.87%.
 
On Tuesday, Sibanye shareholders will vote in a general meeting on ordinary and special resolutions relating to the proposed Stillwater Mining transaction. Stillwater is a platinum producer and the acquisition is potentially a game changer for Sibanye. Assuming shareholder approval is obtained, 30% of group production would be based in America and platinum will be increasing to around 40% of Sibanye’s group profits.  

The move to the US translates into lower costs, combined with higher productivity due to mechanised mining - thus improving the total group cost and cash flow profile.Sibanye would become the fourth largest PGM producer in the world and third in palladium.

Crude Oil prices recouped some of last week’s losses but softened 0.29% to $51.81/bbl during trade on Monday. The price remains under pressure despite Opec seemingly pointing to extending production cuts and geo-political concerns with North Korea.

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