South Africa Market Review
South African markets closed in the red yesterday, after the US President, Joe Biden warned of tougher sanctions on Russia amid its ongoing war with Ukraine. Retailers, Massmart Holdings (JO:MSMJ) and Steinhoff International Holdings (JO:SNHJ) N.V. plunged 4.7% and 3.4%, respectively. Diversified miners, African Rainbow Minerals (JO:ARIJ), Merafe Resources and Pan African Resources (JO:PANJ) shed 3.8%, 2.1% and 0.7%, respectively. Financial firms, Absa (JO:ABGJ) Group, FirstRand (JO:FSRJ) and Nedbank Group (JO:NEDJ) declined 3.5%, 2.9% and 1.7%, respectively. Harmony Gold Mining and Gold Fields (JO:GFIJ) dropped 2.6% and 1.6%, respectively. On the contrary, real estate companies, Attacq (JO:ATTJ), Capital & Counties Properties (JO:CCOJ) and Fortress REIT surged 7.6%, 2.1% and 1.6%, respectively. The JSE All Share index declined 0.7% to close at 75,286.61.
UK Market Review
The UK market finished firmer yesterday, buoyed by broad based gains in utility and healthcare sector stocks. Utility companies, National Grid (LON:NG) and SSE (LON:SSE) advanced 3.6% and 3.5%, respectively. Water utility companies, United Utilities Group (LON:UU) and Severn Trent (LON:SVT) added 3.5% and 3.1%, respectively. Pharmaceutical companies, GlaxoSmithKline (LON:GSK) and Dechra Pharmaceuticals gained 3.1% and 2.4%, respectively. Miners, Glencore (LON:GLEN), Anglo American (JO:AMSJ) and Antofagasta (LON:ANTO) rose 2.3%, 1.8% and 0.7%, respectively. On the flipside, equipment rental company, Ashtead Group (LON:AHT) shed 2.9%. Travel and leisure companies, International Consolidated Airlines Group (LON:ICAG) S.A. and Whitbread (LON:WTB) declined 1.5% and 0.7%, respectively. The FTSE 100 index advanced 0.7% to close at 7,613.72.
US Market Review
US markets ended lower yesterday, as investors stay cautious on prospects of more sanctions on Russia by the US. Twitter gained 2.0%, after the social media company announced Elon Musk’s appointment to its board. However, technology companies, salesforce.com (NYSE:CRM) and Intel (NASDAQ:INTC) shed 4.0% and 2.2%, respectively. Exxon Mobil Corporation (NYSE:XOM) fell 0.5%. Meanwhile, the company announced that its 1Q22 profit could surpass $9.00bn, partly due to billions more earned from rising crude prices. The S&P 500 index fell 1.3% to settle at 4,525.12, while the DJIA index declined 0.8% to close at 34,641.18. The NASDAQ index eased 2.3% to end the trading session at 14,204.17.
Asia Market Review
Asian markets are trading lower this morning, tracking overnight losses on Wall Street. On the data front, China’s service sector activity dropped in March. On the equities front, in Japan, transport company, Kawasaki Kisen Kaisha (T:9107) has plunged 5.7%. On the contrary, financial firm, Chiba Bank has added 1.8%. In Hong Kong, optical products company, Sunny Optical Technology Group (HK:2382) has plummeted 8.3%. On the flipside, Hang Lung Properties has risen 1.5%. In South Korea, electronics company, LG Electronics (KS:066570) has shed 2.1%. Meanwhile, Central Insight has soared 18.3%. The Nikkei 225 index is trading 1.8% lower at 27,281.91. The Hang Seng index has declined 1.5% to trade at 22,169.37, while the Kospi index is trading 0.9% lower at 2,733.56.
Commodities
At 06:00 SAST today, Brent spot prices rose 1.2% to trade at $107.76/bl, reversing previous session’s losses.
Yesterday, Brent spot prices fell 1.9% to settle at $106.43/bl, amid worries about growing coronavirus cases in China dampening demand. However, losses were capped by supply chain concerns following sanctions on Russia for alleged war crimes in Ukraine. Meanwhile, the American Petroleum Institute (API) reported that crude oil inventories rose by 1.10mn bls for the week ended 1 April.
Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 1.3% to $7.34/bushel.
At 06:00 SAST today, gold prices marginally declined to trade at $1,922.82/oz. Yesterday, gold declined 0.5% to close at $1,923.60/oz, as a stronger greenback and US Treasury yields dampened demand for the safe haven yellow metal.
Yesterday, copper declined 0.2% to close at $10,433.00/mt. Aluminium closed 0.4% higher at $3,443.50/mt.
Currencies
Yesterday, the South African rand weakened against the US dollar. In US, service sector activity grew in March, boosted by an ease in pandemic related restrictions, but higher fuel and commodity prices amid the Russia-Ukraine conflict created uncertainty for many businesses. Meanwhile, the US Federal Reserve (Fed) Governor, Lael Brainard stated that he expects a combination of interest rate increases and a rapid balance sheet runoff to bring US monetary policy to a "more neutral position" later this year, with further tightening to follow as needed.
The yield on benchmark government bonds mostly rose yesterday. The yield on 2026 bond rose to 8.17%. Further, the yield on 2023 bond advanced to 5.47%, while that for the longer-dated 2030 issue fell to 9.54%.
At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R14.6979, while the euro is trading 0.1% higher at R16.0179. At 06:00 SAST, the British pound has gained 0.2% against the South African rand to trade at R19.216.
Yesterday, the euro declined against most of the major currencies. In Germany, service sector activity expanded more than expected in March. In the eurozone, business growth accelerated in March, as the economy reopened from lockdown restrictions following a surge in the Omicron coronavirus cases.
At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.0899, while it has weakened 0.1% against the British pound to trade at GBP0.8336.
Economic Updates
In the UK, the final services PMI rose to a level of 62.60 in March, compared with a level of 60.50 in the previous month. Market expectations were for the services PMI to advance to a level of 61.00. The preliminary figures had indicated a rise to 61.00.
In March, the services PMI in Spain recorded a drop to 53.40, compared with a reading of 56.60 in the prior month. Market expectations were for the services PMI to ease to a level of 54.30.
The services PMI dropped to 52.10 in Italy, in March, compared with a reading of 52.80 in the previous month. Market expectations were for the services PMI to fall to 51.50.
Industrial production fell 0.9% in France on a MoM basis in February, compared with a revised rise of 1.8% in the prior month. Market anticipations were for industrial production to advance 0.3%.
Manufacturing production in France registered a drop of 0.5% in February on a MoM basis. Manufacturing production had climbed by a revised 2.2% in the prior month.
In March, the final services PMI recorded a rise to 57.40 in France, compared with a reading of 55.50 in the previous month. The preliminary figures had also indicated a rise to 57.40. Market anticipations were for services PMI to climb to 57.40.
In March, the final services PMI in Germany rose unexpectedly to a level of 56.10. In the previous month, services PMI had recorded a level of 55.80.
The final services PMI rose unexpectedly to a level of 55.60 in March, in the eurozone. The preliminary figures had recorded a drop to 54.80. Markets were anticipating services PMI to drop to 54.80.
The trade deficit in the US remained unchanged at $89.20bn in February, compared with market expectations of a trade deficit of $88.50bn. US had posted a trade deficit of $89.20bn in the prior month.
The Redbook index in the US advanced 14.3% in the week ended 02 April 2022 on a YoY basis. The Redbook index had climbed 12.9% in the previous week.
In March, the ISM Services Index in the US recorded a rise to 58.30, higher than market expectations of an advance to a level of 58.00. In the previous month, the ISM Services Index had recorded a reading of 56.50.
The Caixin/Markit services PMI index recorded an unexpected drop to 42.00 in March, in China. Markets were expecting the Caixin/Markit services PMI index to rise to a level of 53.00.
Corporate Updates
South Africa
Alphamin (JO:APHJ) flags record profit as metal prices soar: Alphamin Resources, which mines tin in the northeastern Democratic Republic of the Congo, has flagged a rise in core profit of almost a third to a record $98.00mn (R1.43bn) for its first quarter to end-March, continuing to cash in on soaring metal prices.