The JSE tracked firmer global markets on Thursday as the global equity market regained momentum after struggling for direction this week.
Shares in insurance giant Old Mutual rose to a seven-month high in intraday trade after it announced plans to return about R10bn to shareholders through unbundling part of its stake in Nedbank.
The company said after markets closed on Wednesday that it planned to distribute 12.2% of its 19.4% stake in Nedbank, which is SA’s fourth-largest bank by assets.
The company’s shares closed 6.12% firmer at R13.70, after reaching about 8% earlier.
Markets have been struggling for direction after a sharp sell-off last week. Comments from US Federal Reserve officials this week helped calm investors’ concerns, with the JSE gaining for the second day, pushed higher by retailers and miners.
Fed chair Jerome Powell has reiterated that inflation fears should be temporary, which seemed to have soothed market jitters.
“Asset pricing remains primarily led by global events, more precisely, the utterances of the US federal open market committee (FOMC). If you’re still doubtful about the Fed’s influence on markets, you need only look at what happened in the last week. Risk appetite will fluctuate with the Fed and its assessment of conditions,” said RMB Nema Ramkhelawan-Bhana.
The JSE all share gained 0.67% to 66,26349 points and the top 40 0.71%. Retailers rose 1.51%, industrial metals 1.26%, resources 1.06% and financials 1.05%.
At 5.25pm, the Dow Jones industrial average was 0.69% at 34,108.95 points. In Europe, the FTSE 100 had gained 0.53%, France’s CAC 40 1.25% and Germany’s DAX 0.83%.
Covid-19 infections in SA continue to increase at an alarming rate, with Gauteng, the country’s economic hub, the worst affected amid reports of shortages of hospital beds and oxygen. Calls for President Cyril Ramaphosa to implement stricter lockdown measures in Gauteng are growing louder.
“The most recent wave has been the worst and a peak has yet to emerge. It’s an undeniable fact, laid bare by the rising daily case rate, shortages of hospital beds and lack of oxygen for critical patients, most crucially in Gauteng. I need not relay the figures. They’re simply too stark to ignore,” said Ramkhelawan-Bhana.
“While market participants have priced in the third wave as a peripheral risk, it is likely to become more concerning.”
At 5.07pm, the rand had weakened 0.27% to R14.2456/$ and 0.36% to R16.9942/€, while it had firmed 0.15% to R19.8076/£. The euro was little changed at $1.1929.
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