Market wrap

The JSE closed flat on Thursday after reaching a fresh all time high in intraday trading‚ with banks and financials buoying the local bourse‚ while miners and resources weighed.

Futures closed a tad firmer as mining weakness weighed. The local currency managed to recoup some losses in afternoon trade after falling to a new four-year low and bonds strengthened due to a firmer‚ yet weak rand.

EQUITIES

The JSE closed flat on Thursday‚ off its earlier all time high‚ with strength from banks and financials countering some softness in the mining and resources sectors. At 5pm‚ the JSE all share index ticked up 0.08% to 40‚908.58 points‚ with the gold‚ resources and platinum indices dipping 1.63%‚ 0.30% and 0.24% respectively. Banks added 0.95% and financials gained 0.51%. European markets were broadly higher‚ as a well-received Spanish government bond auction and dovish comments from a European Central Bank official helped offset weak employment data‚ Dow Jones Newswires reported. The London FTSE 100 index was seen trading 0.40% firmer at 5pm local time‚ and the US Dow Jones Industrial index was 0.41% firmer at the same time.

CURRENCIES

The rand recovered slightly on Thursday afternoon having dropped to a new four-year low against the dollar earlier in the day. “The rand is being driven by a combination of factors‚” said William Van Rijn‚ a senior trader at Nedbank Capital “When that currency account data become known it provided the catalyst for the move in the rand‚” he said. On Wednesday the local unit broke through previous support at R9.19/20 per dollar on news that there was an illegal strike at Anglo American’s Kleinkopje coal mine. Although Anglo American confirmed later in the day that production had resumed at the Kleinkopje mine the news had triggered stop-losses that fuelled movements to even lower levels. At 6.02pm the rand was bid at R9.1855 to the US dollar from R9.2549 at Wednesday’s close and R9.1634 at Tuesday’s close. The local currency was bid at R11.9136 to the euro from its previous close of R11.9896 and at R13.8134 against sterling from R13.8122 before. The euro was bid at $1.2977 from $1.2958 at Wednesday’s close and $1.3030 at Tuesday’s close.

BONDS

The South African bond market firmed in afternoon trade on Thursday following a recovery in the rand to the R9.20 per US dollar level after it moved above R9.29 in the morning. “Bonds have had a more muted reaction to the rand’s gyrations. That is in part because volumes have been thin. The good news was that manufacturing production rebounded in January‚ as that may mean that government revenue did so as well‚” a local bond trader said. At 6pm the benchmark R186 was trading at 7.415% from 7.440% at Wednesday’s close. The R157 was trading at 5.400%‚ the same as Wednesday’s close. The R207 was trading at 6.365% from its previous close of 6.360%. Manufacturing production growth rose to 3.9% year-on-year in January Statistics SA said on Thursday after easing to 2.0% year-on-year in December from 3.7% year-on-year in November.

FUTURES

South African near-dated futures ended a tad higher on Thursday as general weakness in mining stocks weighed on the market. The near-dated Alsi ended up 0.10% to 36‚351 points. The total number of contracts that changed hands was 42‚761 compared with 53‚539 on Wednesday. US stocks rose‚ bringing the Standard & Poor's 500-stock index within a few points of an all-time high‚ as labour market data topped expectations‚ Dow Jones Newswires reported. At 5.58pm local time‚ the Dow Jones Industrial Average was up 0.39%.