MARKET WRAP: JSE closes at seven-week high as banks climb 3%

The JSE bucked the global trend to close higher on Monday, reaching its best level in seven weeks, with banks climbing more than 3%.

The local bourse shrugged off negative global sentiment fuelled by a drone attack on Saudi Arabia’s state-owned oil facilities at the weekend.

Most global equities remained under pressure on Monday as investors rushed to safe-haven assets. The price of Brent crude oil jumped 20% in intra-day trade after the attack wiped out more than half the country’s production capabilities.

The US blamed Iran for the attack, while President Donald Trump said the country will release oil from the strategic petroleum reserves — an emergency storage of fuel that is kept underground in Louisiana and Texas by the US department of energy.

“Regardless of who is responsible for these attacks, the US accusations against Iran can only wash away the hopes for improved diplomatic relations between the two countries following [national security adviser] John Bolton’s departure last week.

“Hence oil prices should settle higher than their pre-attack levels,” said senior market analyst at London Capital Group Ipek Ozkardeskaya.

Shortly after the JSE closed, the Dow was down 0.38% to 27,116.59 points. In Europe, the FTSE 100 had lost 0.35%, France’s CAC 40 0.63% and Germany’s DAX 0.55%.

Earlier, the Shanghai Composite was flat while Hong Kong’s Hang Seng fell 0.83% and Japan’s Nikkei 225 was closed for a public holiday.

At 5.20pm, the rand had firmed 0.12% to R14.6081/$, 0.73% to R16.0789/€, 0.56% to R18.1525/£. The euro was 0.6% stronger at $1.1007.

Gold was up 1.03% to $1,503.94/oz while platinum was down 2.23% to $934.47. Brent crude jumped 12% to $67.54 a barrel. 

The benchmark R186 government bond was weaker, with the yield rising 9.5 basis points to 8.23%. Bond prices move inversely to bond yields.

The JSE all share rose 1.28% to 57,853.90 points and the top 40 1.28%. Banks climbed 3.66% and financials 2.85%.

Nedbank gained 5.32% to R251.24, FirstRand 4.6% to R67.75, Absa 3.03% to R172.06 and Standard Bank 2.94% to R193.30. 

Naspers rose 1.92% to R2,544.95. The JSE heavyweight said on Monday that the majority of its shareholders voted to invest in its Amsterdam-listed investment Prosus.

Sasol jumped 9.85% to R306, its biggest one-day gain in more than six years, benefiting from the surge in oil prices. The company’s share price, which reached a one-month high on Monday, has been knocked this year, down 28%, due in the main to cost overruns at its Lake Charles project in the US.

Quantum Foods climbed 5.82% to R4 despite the feed and poultry business saying that its headline earnings per share are expected to be at least 42% lower in the year to end-September.

Rhodes Food Group fell 0.59% to R16.88. The company said on Monday that its turnover grew 13.4% in the 10 months to end-July.

African Oxygen climbed 4.91% to R20.72. The industrial gases company said on Monday that its headline earnings per share increased 7% to 111.3c in the six months to end-June.

mjoo@businesslive.co.za