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Financials rally on back of a firmer rand

Jan 16 2018 17:49
Musa Makoni, EasyEquities

Cape Town - The JSE tracked higher on Tuesday as the rand propelled financial stocks higher.

The rand strengthened significantly against the greenback to peak at R12.19 against the US dollar. This was despite the US dollar recouping some of its losses following four consecutive sessions of downtrends. The rand retraced slightly to trade at R12.27/$ at 17:00.

Top gainers on the JSE included all the major banking stocks namely Standard Bank [JSE:SBK], Barclays Africa [JSE:BGA], First Rand [JSE:FSR] and Nedbank [JSE:NED], which gained 3.98%, 3.49% 2.59% and 2.07% respectively. Retailers Mr Price [JSE:MRP] and Massmart [JSE:MSM] also benefited from the firmer rand to gain 3.41% and 4.06% respectively.

The Foschini Group [JSE:TFG] jumped 5.17% to close at R179.85 per share on the back of a positive sales update.

A positive trading statement from Adcock Ingram [JSE:AIP] saw the stock climbing 5.80% to close at R63.47 per share. The trading update indicated that they are expecting headline earnings per share for the 6 months ended December 31, 2017, to be not less than 27% higher than the previous comparable period. They also expect EPS for the same period to be not less than 12% higher relative to the same comparable period.

Other notable moves higher were from MMI Holdings [JSE:MMI], Consolidated Infrastructure Holdings [JSE:CIL] and Imperial Holdings [JSE:IPL] which gained 7.43%, 7.06% and 6.02% respectively. Clover Industries [JSE:CLR] recorded another day of gains to close at R14.45 per share, up 6.80%.

Net 1 UEPS [JSE:NT1] came under significant pressure as it shed 10.22% to close at R152.00 per share. Kumba Iron Ore [JSE:KIO] continued to trade under pressure as it shed another 6.85% to close at R372.00 per share. Miners Impala Platinum [JSE:IMP], Sibanye-Stillwater [JSE:SGL] and African Rainbow Minerals [JSE:ARM] shed 4.20%, 3.73% and 3.39% respectively. EOH Holdings [JSE:EOH] lost 2.82% whilst index heavyweight Richemont [JSE:CFR] shed 0.92%.

The blue chip JSE Top-40 index ended the day 0.65% firmer, whilst the broader All-Share index gained 0.68%. The Resources index was the only major index to close in the red as it lost 2.30%. The Financials index gained 2.16% whilst the Industrials index firmed by 1.29%.

Gold eased from its recent rally to reach an intra-day low of $1 331.97/Oz. This weakness in the precious metal was due to the rebound in the US dollar as indicated by the US dollar index which inched back to 90.826index points, from Monday’s low of 90.386 index points. Gold was trading at $1 333.85/Oz just after the JSE close.

Platinum and palladium also traded softer with palladium in particular taking the biggest knock to trade at $1 101.85/Oz just after the JSE close. Platinum slipped back below $1 000/Oz to bottom out at $985.85/Oz. it was recorded at $998.15/Oz just after the JSE close.

Brent Crude eased in Tuesday's session following its break above $70 per barrel on Monday. The commodity was trading at $69.70 per barrel just after the JSE closed. JSE listed oil and gas producer, Sasol [JSE:SOL] lost 1.81% to close at R451.04 per share.

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