The JSE closed marginally firmer on Thursday amid mixed global peers after key data releases raised the likelihood of an interest rate cut next month.
The much-anticipated US growth estimate for the second quarter of this year was released on Thursday. The preliminary figure of the US Bureau of Economic Analysis (BEA) put second-quarter GDP growth at 3%, nearly double the 1.4% recorded in the first quarter.
The BEA said the increase “primarily reflected increases in consumer spending, private inventory investment and business investment”.
Stats SA also released key data on the day, estimating a 4.2% year-on-year rate of producer inflation for July. This is down from 4.6% in June, and notably lower than the consensus expectation of 4.5%.
Encouraged by the slight drop in producer inflation, SA investors will scrutinise the economic data still to come later this week. Money supply, trade and budget balance data, due on Friday, will offer important insights on the SA economy. The US personal consumption expenditures index, the Federal Reserve’s favoured inflation indicator, is also due on Friday.
“Traders are looking for clues to the US economy and inflation outlook, which will drive the Fed’s monetary policy actions,” said TreasuryOne currency strategist Andre Cilliers.
“Markets are pricing in a 25 basis point (bps) rate cut next month but there are growing bets on a 50 bps cut,” Cilliers said.
The JSE all share was up 0.26% to 84,239 points, with the top 40 adding 0.34%. Resources recovered some of Wednesday’s losses, up 0.53%. Banks added 0.35%, financials 0.44% and industrials 0.13%, while SA listed property lost 0.21% and general retailers 0.15%.
Among the worst-performing shares was Blue Label, the share price of which fell 3.14% to R5.25, its largest intraday loss since early-April. This came after the technology and telecommunications company released its annual financial results, which reported a 5% fall in gross profit.
The share price of Sasol, which released its annual report, was up 0.32% to R143.10.
In commodities markets, prices returned to positive territory with gold, platinum and Brent Crude gaining.
At 6.15pm the rand had firmed 0.3% to R17.7661/$, 0.72% to R19.6899/€ and 0.33% to R23.4153/£. The euro was 0.34% weaker at $1.1082.
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