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Cape Town - The JSE firmed on Tuesday, with industrial stocks and banks carrying the local market higher. A rally in Naspers skewed the firmness of the overall market, whilst a strong turnaround in the rand as well as weaker commodity prices saw resource stocks decline.
Naspers [JSE:NPN] continued its run, firming 0.79% to R2558.70 per share. The share represents the largest company on the JSE, making up more than 18.53% of the Top 40, and commands the highest share price on the market. Access to purchasing fractions of the share would give investors an opportunity to own the economic benefits of one of the most successful companies in South Africa.
The blue-chip Top 40 Index closed firmer, with a 0.14% gain, whilst the broader All Share Index closed 0.18% up. The Financial Index led the JSE with a 0.35% gain, followed by the Industrial Index which closed 0.31% up. Resources shed 0.95% and gold miners lost 1.11% with Anglo American [JSE:AGL] -3.89%, Sibanye Gold [JSE:SGL] -3.51%, and Lonmin [JSE:LON] -3.39%.
READ: PMI declines sharply in April - report
Disappointing South African economic data released shows that seasonally adjusted Manufacturing Purchasing Managers Index (PMI) for South Africa fell to 44.7 in April from 52.2 in March. The ABSA PMI is an indicator of the economic health of the manufacturing sector. This was the first survey after the recent cabinet reshuffle and sovereign credit rating downgrades. The data showed a sharp decline in new sales orders and inventories, among a contracting manufacturing economy.
International markets
In US markets; the world’s largest company by market capitalisation reports earnings after the bell. Apple [Nasdaq:AAPL] is expected to post revenue exceeding $53bn, while iPhone sales are forecast to increase a modest 1% as many consumers are believed to be waiting for the next iPhone in September 2017 – which will mark the 10th anniversary of the smart device.
The Federal Reserve’s policy-making committee will be meeting over Tuesday and Wednesday. The central bank is scheduled to release its policy decision on Wednesday at the conclusions of its two-day meeting. Investors are expecting a modest interest rate hike in June, but will remain cautions until the announcement of Wednesday.
Gold weakened further, down 0.38% to $1252/Oz after the safe-haven bid that has underpinned gold in recent times began to recede. US President Donald Trump took some of the urgency out of geopolitical stress on Monday when he announced that he would be open to meeting with North Korean leader, Kim Jong Un.
Crude Oil Prices drifted lower on Tuesday, down 0.03% to $51.50/bbl as the latest weekly estimates on crude and refined product inventories take centre stage. The American Petroleum Institute (API) will report its estimates of crude stocks after the market close in the US on Tuesday, followed by official figures on Wednesday from the Energy Information Administration. Concerns on higher US crude production are being weighed against the output cuts from major Opec exporters.
*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.
