‘Trump tweet sees investors rush to safety’

Cape Town – Markets ended firmer on Tuesday as banks and retailers gained on the back of a stronger rand. 

Heightened geopolitical risk saw investors buy gold, lifting the safe-haven asset to $1269/Oz by the close of the market. This rally in the precious metal resulted in a +3.31% rally in the Gold Index, led by Harmony Gold [JSE:HAR], which climbed by 5.8%.

Gold was the main beneficiary of heightened geopolitical risk led by US President Donald Trump’s latest twitter threats toward North Korea, with the safe-haven asset reaching its highest price for the year.

The blue-chip Top 40 closed 0.72% higher whilst the broader All Share Index firmed 0.74% led by gold miners and a resurgence in financial stocks.  The JSE Financial Index firmed 1.11%, followed by the Industrial Index by 0.66%.  The Resource index closed flat as diversified miners traded lower on a marginally firmer rand. 

Data released by Stats SA showed that South African manufacturing output dropped by 3.6% year-on-year in February, worse than the 0.4% increase recorded in January and the consensus market forecast of a marginal decline of 0.2%.  

While the data is weaker than expected, it did not have much influence on the market which had largely priced in the low growth environment that accompanies a ratings downgrade.

There was little to no reaction in the rand, instead we saw it reaching highs of R13.77 against the green back, and at the time of the JSE close it was trading at R13.86/$.

Brent Crude Oil backed off Monday’s gains by -0.68% to $55.60/bbl after the G7 world leaders met with Middle Eastern allies. 

The G7 has made a unified plea for Russian President Vladimir Putin to break ties with Syria's Bashar al-Assad, with the meeting highlighting the growing military threat between the US and Syria that could escalate should Russia defend its ally.

*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.