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Miners rally as rand sinks in troubled waters

Jun 05 2019 20:04
Paul Chakaduka,GT247.com

Equity markets continued to rally on Wednesday as the voices of a US rate cut rang louder across global markets.

Asian markets bounced off session lows to trade mainly in the black, the Nikkei was up 1.8%, whilst the Hang Seng gained 0.5% and the Asx200 was up 0.41%. The Shanghai CSI 300 closed the day 0.04% in the red to trade at 3597 points. 

GDP numbers released out of Australia on the day indicated that the economy grew by 0.4% in the last quarter, below the market forecast of 0.5%. This point justifies the Reserve Bank of Australia’s move yesterday to cut interest rates by 25 basis points.

The Standard Bank PMI for May came in at 49.3, declining from 50.3.  An index reading of 50 or more represents an expansion, a reading below 50 suggests that the economy is contracting. This is in line with a 3.2% slump in GDP in the first quarter.

The miners on the JSE continued their rally as a weaker rand provided them with some support.  The familiar suspects made the gainers list today, as Gold Fields Ltd [JSE:GFI], Impala Platinum Ltd [JSE:IMP], AngloGold Ashanti  [JSE:ANG], and Harmony Gold Ltd [JSE:HAR], advanced 6.35%, 4.83%, 4.22% and 3.8% respectively. 

The worst performing shares on the day were led by out of favour Massmart [JSE:MSM],  which eased 4.2% to trade at 6185c at the close of business. 

The former giant posted an intraday low of 6152c the lowest the share price has been in 10 years. The JSE All-Share index closed 1.01% firmer whilst the JSE Top-40 index gained 1.04%.The Resource index rallied once more advancing 1.53%, the Industrials were firmer inching up 1.06% whilst the Financials only managed a 0.41% gain.

Other notable losses were recorded by Tongaat Hulett [JSE:TON], Afrimat [JSE:AFT] and Aspen [JSE:APN], which shed 4.12%3.38% and 2.89% respectively.

The $USD eased today, however this did not give the commodities any room to rally. At 17.00 CAT, Palladium was 1.36% weaker to trade at $1322/Oz, Platinum also eased shedding 1.07% to trade at $810.10/Oz, whilst Gold was 0.3% firmer to trade at $1332.55/Oz.

Brent crude continued to slide today dipping below the $60/barrel level to trade at $59.97.The Rand was on the backfoot on Wednesday breaching R14.80 against the dollar in afternoon trade.

At 17:00 CAT the Rand was trading at R14.86 against the USD, R16.71 to the Euro and R18.90 to the Pound Sterling. 

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