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Johannesburg - Investors on the JSE repositioned themselves on Tuesday morning after the recent uncertainty caused by rising bond yields and the strong dollar after Donald Trump’s election as US president, with the result that very little happened on the JSE.
With the rand still relatively strong at R13.84 to the dollar, boosted by the news that two international credit rating agencies have kept South Africa’s credit rating intact for now, the major indices did not move much.
The dollar took a breather on Tuesday as global bonds steadied from their recent rout.
The resources index was again 0.64% lower although commodity prices strengthened further, but the Industrial index gained 0.79% by mid-morning despite a strong rand and lower European markets. The big market capitalisation shares, which represent more than half of the market's value, were all marginally higher after the previous day's losses.
The result was that the All-share index traded 0.34% higher at 50 366 points by mid-morning, while the Top 40 index was 0.37% stronger at 43 777 points. The Financial index, which benefited most from the rating agencies’ decision, was again 0.43% higher after Monday’s strong rally.
The international markets were also in limbo on Tuesday morning after Wall Street suffered its worst performance in nearly a month as some investors booked profits in the financial and consumer discretionary sectors.
European markets were also lower as political risks resurfaced ahead of a referendum in Italy this weekend. Worries about Italy's banking system are building up ahead of a December 4 referendum on constitutional reform, which could decide the political future of Prime Minister Matteo Renzi.
Among the big dual-listed industrial shares Naspers [JSE:NPN] traded 0.49% higher at R2 050.00, while British American Tobacco [JSE:BTI] was only 0.13% stronger at R763.00. Richemont [JSE:CFR] gained 0.42% to R87.90 and Anheuser-Busch InBev [JSE:ANH] was 0.19% up at R1 444.00.
Some of the locally listed companies boosted the Industrial index by trading at new 52-week highs. One of them is Barloworld [JSE:BAW], which gained 2.32% to a new high of R106.41 after the share added more than 19% over the previous seven days.
The rally started after the company announced record results from its motor trading division, which helped grow revenue 6% to R66.5bn and after-tax profit 30% to R2bn in its financial year to end-September.
Tiger Brands [JSE:TBS] was also on a 52-week high after the share price gained 0.67% to a 52-week high of R408.48. It rallied more than 9% over the past seven days after the group reported a 19% rise in full-year profit after disposing of a loss-making Nigerian unit.
The major dual-listed resources shares were all lower as investors took profits after some breathtaking gains recently. BHP Billiton [JSE:BIL] was 1.61% lower at R228.58 and Anglo American [JSE:AGL] lost 1.61% to R209.58.
Industrial metals extended their blistering rally on Tuesday. Iron ore futures traded in China surged to their highest since early 2014, while zinc touched a nine-year peak. Steel plant closures in China have tightened supply while Beijing has approved a string of massive infrastructure projects, including a $36bn railway plan just this week.
Despite this, Kumba [JSE:KIO] traded 0.15% lower at R170.56. The current rally in metal prices has already been discounted as Kumba gained 33.64% over the past 30 days and 367% for the year to date.
FirstRand [JSE:FSR] was again trading at a new 52-week high in the financial sector after gaining 1.42% to R52.91.
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