JSE takes breather after previous session's gains

Jan 11 2017 12:26
David van Rooyen

The new JSE logo. (Supplied)

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Last traded 380
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Cumulative volume 162605
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Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 264
Change 2
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Cumulative volume 836523
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Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA


Last traded 3773
Change 31
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Cumulative volume 1172962
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Last Updated: 01/01/0001 at 12:00. Prices are delayed by 15 minutes. Source: McGregor BFA

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Johannesburg - The JSE took a breather on Wednesday after the previous day's euphoria, when the market briefly followed London's FTSE index sharply higher.

By mid-morning the shares which lost ground initially were heading upwards again, with indices again substantially higher.

Most of the shares which pulled the All-share index 1.35% higher on Tuesday were initially lower on some profit-taking, as initial indications were that the London market is also due for a breather, but they recovered rapidly.

International markets are on tenterhooks on Wednesday as investors look to president-elect Donald Trump's news conference later in the day for clues on his policies on taxes, fiscal spending, international trade and currencies.

Among the shares that pulled back on Wednesday are Anglo American [JSE:AGL], which gained more than 7% on Tuesday on the back of a higher copper price, BHP Billiton [JSE:BIL], which was more than 4% stronger, and and Richemont [JSE:CFR], which was almost 5% stronger.

By mid-morning Anglo American was 0.17% lower at R205.05. BHP Billiton lost more than 3% in early trade, but was again 0.36% stronger at R232.43 by mid-morning. Anglo was supported on Tuesday by a jump in the copper price on expectations that the Chinrse economy is recovering.

Richemont, the star performer in the industrial sector which gained almost 5% in busy trade on Tuesday, was at one stage 4% lower on Wednesday but regained those losses and traded 0.26% higher at R95.75.

By mid-morning on Wednesday the All-share index was again 0.42% higher at 51 458 points, while the Top 40 index had gained 0.57% to 4 274 points.

The Resources index was 0.99% up with the Industrial index 0.27% stronger. The Financial index gained 0.62%

Analysts said Trump's election campaign calls for tax cuts and more infrastructure spending which has boosted US shares and the dollar, but his protectionist statements and a flurry of off-the-cuff tweets have kept many investors on edge.

"There are underlying expectations that Trump's tax cuts and infrastructure spending will boost the US economy, which should support markets," said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management.

"On the other hand, if he takes a hard line stance on China in line with his campaign promises, then China would probably take counter-measures, raising concerns about tensions between the US and China," he added.

Trump has vowed to label China a currency manipulator on his first day in office on January 20, and has threatened to slap huge tariffs on imports from the country. US House of Representatives Speaker Paul Ryan and top members of Trump's transition team are discussing a controversial plan to tax imports.

Economists have warned that protectionist measures could stifle international trade and hurt global growth.

Some of the strong performances on the JSE are based on expectations that the Chinese economy is in a recovery mode, which will boost South Africa’s commodity exports and companies like Naspers [JSE:NPN] and Richemont with an interest in China.

Naspers, which has a direct interest in the Chinese economy through its 34% stake in Chinese internet giant Trencent, was 1.58% stronger at R2 194.60. The share has gained 7.27% over the past seven days, boosted by similar gains in the Tencent share price.

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equities  |  jse  |  markets



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