Positive signals out of China that Covid restrictions might be lifted in Shanghai following a third straight day of no infections outside of quarantine facilities helped markets to rise on Tuesday.
Traders cheered the positive sentiment from China with the potential for supply-chain disruptions brought on by the Covid restrictions coming to an end. The Chinese economy is suffering under the country’s zero-Covid19 policy, which seeks to eradicate the virus rather than live with it, causing major disruptions to supply chains all around the world as Chinese supplies aren’t readily available.
The JSE gained 0.70% and by the close of trade the All Share Index was at 69,696 points while the top 40 added 0.85%
The biggest mover was bourse heavyweight Naspers, adding 6.67%. Other top performers included Kumba (6.42%), Prosus (5.81%), and Glencore (4.12%).
Tuesday’s losers included Hosken Consolidated Investments (-4.05%), Gold Fields (-3.49%), and retailers Woolworths (-3.43%) and Shoprite (-2.95%)
Retail peer Pick ‘n Pay added 1.28% following the release of its latest financials where the company said headline profit per share had increased by 14.5% despite a chaotic year that included the July 2021 riots, KZN floods, load shedding, and the ongoing war in Ukraine. Group turnover increased by 5.2% while the retailer said it would be partnering with e-commerce giant Takealot, for on-demand home delivery.
The group said it would also be opening a new store brand to compete with Checkers and Woolworths in the affluent market band.
In the currency markets, there was some dollar weakness today with emerging markets stepping to the fore and erasing some of the losses they have endured in recent weeks.
The rand broke below the R16.00 level and is currently trading at R 15.95/$.
“There is a little bit of risk tonight with the speeches of a couple of Fed members, with Fed Chair Powell’s speech being the most important. Any hawkish tone by Powell could result in a little bit of Rand’s weakness as this will favour some Dollar strength and vice versa,” comments TreasuryONE.
On the commodity front, gold is currently trading at $1,822 while platinum and palladium are trading in the green at $954 and $2,062 respectively.
“Brent crude is trading higher as demand from China due to a relaxation in Covid rules has caused oil to jump to $115 per barrel. An eye also needs to be trained on the Eurozone impasse on banning Russian oil, as not all the member states are in agreement. Should the law be vetoed, it could open the door for more supply into the EU and a potential drop in the oil price,” says TreasuryONE.
