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JSE swings into gains after weak session

Jan 30 2020 21:52
*Musa Makoni

The local bourse reversed losses towards the close to end the day firmer following a session where it traded mostly softer. 

Global stocks resumed their downtrend on Thursday on the back of growing concerns over the deadly coronavirus which has seen many commercial airlines suspending flights to China, and put health officials across the globe and the World Health Organization on high alert.

Declines started off in Asia where the Nikkei fell 1.72%, while in Hong Kong the Hang Seng fell 2.62%. Weakness was recorded across all the major indices in Europe as well as the USA where equity futures traded in the red.

US equity markets shrugged slightly better than expected GDP numbers to remain trading softer on the day.

In terms of local economic data, Statistics SA released producer inflation numbers for the month of December which showed that inflation picked up during the period.

PPI year-on-year advanced 3.4% from a prior recording of 2.3%, while PPI month-on-month rose 0.2% from a prior recording of -0.3%. The rand slipped against the greenback to a session low of R14.77/$ as investors dumped emerging market currencies.

At 17.00 CAT, the rand was trading 0.78% weaker at R14.74/$. On the JSE, PPC [JSE:PPC] closed among the day’s biggest losers after the stock fell 4.74% to close at R2.21, while construction firm WBHO [JSE:WBO] lost 2.14% to close at R131.00.

Tiger Brands [JSE:TBS] struggled as it fell 5.04% to close at R201.31, while sector peer Rhodes Food Group [JSE:RFG] lost 3% to close at R16.49.

Brait [JSE:BAT] which is now trading ex-rights slipped by another 3.51% to close at R8.25, while African Rainbow Capital Investments [JSE:AIL] dropped 2.6% to close at R3.75. Imperial Logistics [JSE:IPL] weakened by 2.82% as it close at R51.99, while EOH Holdings [JSE:EOH] lost a further 1.81% to close at R8.69.

Significant losses were also recorded for Hammerson [JSE:HMN] which dropped 2.88% to close at R46.91, as well as Mediclinic [JSE:MEI] which closed 72.20 after losing 1.1%. Massmart [JSE:MSM] was buoyed by the release of its plans to reorganize its operating model, which were released simultaneously with its trading and sales update.

Despite weaker sales and revenue reported in the sales update, the stock surged 6.44% to close at R53.75. Gold miners rebounded in today’s session which saw gains being recorded for Gold Fields [JSE:GFI] which advanced 7.16% to close at R95.28, as well as DRD Gold [JSE:DRD] which released a positive half-year trading statement which resulted in the stock rising 4.3% to close at R9.22.

Pan African Resources [JSE:PAN] gained 3.11% to close at R2.32, while Reinet Investments [JSE:RNI] closed at R323.46 after adding 1.88%. Gains were also recorded for Aspen Pharmacare [JSE:APN] which gained 1.87% to close at R117.14, and The Foschini  [JSE:TFG] which rose 1.45% to close at R146.46.

The JSE All-Share index eventually closed 0.39% firmer while the JSE Top-40 index rose 0.42%. The Industrials index closed marginally softer as it only lost 0.03%. The Resources and Financials indices gained 1.05% and 0.36% respectively.

The pressure on brent crude persisted as the commodity was recorded trading 2% weaker at $57.73/barrel just after the JSE close.At 17.00 CAT, Gold was up 0.15% at $1579.03/oz, Platinum was 0.44% firmer at $978.43/Oz, while Palladium was down 0.26% at $228300/Oz.

*Musa Makoni is a trading specialist at Purple Group.

jse  |  market wrap
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