SOUTH AFRICA MARKET REVIEW
- South African markets closed in the red yesterday, pulled down by losses in retail and banking sector stocks and after manufacturing output contracted more than expected in February.
- Retail sector stocks, Massmart Holdings (JO:MSMJ), Truworths International (JO:TRUJ) and Woolworths (ASX:WOW) Holdings Ltd (JO:WHLJ) declined 3.4%, 2.6% and 2.5%, respectively.
- Nedbank Group (JO:NEDJ), Investec and FirstRand (JO:FSRJ) dropped 2.9%, 2.4% and 1.8%, respectively.
- Platinum miners, Royal Bafokeng Platinum (JO:RBPCBe), Anglo American Platinum (JO:AMSJ) and Northam Platinum (JO:NHMJ) shed 1.9%, 0.7% and 0.6%, respectively.
- On the other hand, gold mining firms, Harmony Gold Mining (NYSE:HMY) and Gold Fields (JO:GFIJ) gained 2.9% and 0.8%, respectively.
- The JSE All Share index declined 0.2% to close at 67,053.97.
- The UK market finished firmer yesterday, following dovish minutes from the US Federal Reserve (Fed).
- Johnson Matthey (LON:JMAT) rose 1.5%, after the company stated that its FY21 performance would be around the top end of market expectations as it announced a strategic review of its health business.
- On the flipside, oil companies, BP (LON:BP) and Royal Dutch Shell (LON:RDSa) dropped 2.3% and 2.2%, respectively.
- Paper and packaging companies, Smurfit Kappa Group PLC (LON:SKG), Mondi (LON:MNDI) and DS Smith (LON:SMDS) declined 2.5%, 1.5% and 1.5%, respectively.
- The FTSE 100 index advanced 0.8% to close at 6,942.22.
US MARKET REVIEW
- US markets ended higher yesterday, buoyed by gains in technology sector stocks and after the Fed Chairman Powell repeated his expectation that a rise in inflation this year would be temporary.
- Apple (NASDAQ:AAPL) and Intel (NASDAQ:INTC) gained 1.9% and 1.2%, respectively. Conagra Brands added 0.2%, after the company reported higher than expected 3Q21 profit and sales.
- On the contrary, Constellation Brands (NYSE:STZ) dropped 4.6%, after the company posted a decrease in its 4Q21 profit.
- However, it recorded better than expected earnings.
- The S&P 500 index rose 0.4% to settle at 4,097.17, while the DJIA index advanced 0.2% to close at 33,503.57.
- The NASDAQ index climbed 1.0% to end the trading session at 13,829.31.
ASIA MARKET REVIEW
- Asian markets are trading mostly lower this morning. Meanwhile, China’s consumer price index (CPI) rose more than market expectations in March.
- In Japan, Sony Group (NYSE:SONY) has gained 2.8%.
- In Hong Kong, AAC Technologies Holdings (HK:2018) has shed 0.7% and Tencent Holdings (HK:0700) has lost 0.2%.
- In South Korea, Samsung Electronics (KS:005930) has dropped 0.8%.
- LG Electronics (KS:066570) has added 1.9%.
- The Nikkei 225 index is trading 0.3% higher at 29,802.57.
- The Hang Seng index is trading 0.9% lower at 28,759.38, while the Kospi index is trading 0.1% lower at 3,139.83.
COMMODITIES
- At 06:00 SAST today, Brent spot prices fell 0.2% to trade at $62.72/bl, reversing previous session gains.
- Yesterday, Brent spot prices rose 0.7% to settle at $62.86/bl. Russia stated that the fallout from the COVID-19 pandemic on the global consumption of oil may last until 2023-2024. Meanwhile, Iran and the US held talks with other powers on reviving a nuclear deal that almost stopped Iranian oil from coming to market, reviving tentative hopes Tehran might see some sanctions lifted and add to global supplies.
- Yesterday, the Illinois North Central No.2 Yellow corn spot prices rose 3.6% to $5.7075/bushel.
- At 06:00 SAST today, gold prices declined 0.2% to trade at $1,752.87/oz. Yesterday, gold gained 1.0% to close at $1,755.84/oz, as greenback lost ground and the Fed’s reiteration of its dovish policy stance also bolstered demand for the safe haven.
- Yesterday, copper rose 1.1% to close at $9,018.25/mt. Aluminium closed 1.2% higher at $2,266.11/mt.
CURRENCIES
- Yesterday, the South African rand strengthened against the US dollar. In South Africa, on the data front, manufacturing output contracted more than expected in February, led by declines in the output of petroleum, chemicals, rubber, plastics, furniture and metal products. In the US, Fed Chair Jerome Powell stated that a surge in spending as the US economy reopens, along with bottlenecks in supply, will likely push prices higher this year, but would not result in the kind of year after year price rises that would constitute inflation. On the data front, the number of people filing new claims for unemployment benefits unexpectedly rose for the week ended 2 April, but the increase likely understated the rapidly improving labour market conditions as more parts of the economy reopen and fiscal stimulus kicks in.
- The yield on benchmark government bonds fell yesterday. The yield on 2026 bond fell to 7.36%. Further, the yield on 2023 bond declined to 5.14% while that for the longer-dated 2030 issue fell to 9.21%.
- At 06:00 SAST, the US dollar is trading 0.2% higher against the South African rand at R14.5464, while the euro is trading 0.1% higher at R17.3149. At 06:00 SAST, the British pound has gained 0.2% against the South African rand to trade at R19.9754.
- Yesterday, the euro advanced against most of the major currencies, after the eurozone producer price index (PPI) increased at an accelerated pace on an annual basis in February due to surges for energy and intermediate goods.
- At 06:00 SAST, the euro slipped 0.1% against the US dollar to trade at $1.1904, while it has weakened 0.1% against the British pound to trade at GBP0.8669.
ECONOMIC UPDATES
- The seasonally adjusted manufacturing production index in South Africa eased 1.2% on a MoM basis in February, compared to a revised unchanged reading of 0.0% in the prior month. Market expectations were for the manufacturing production index to rise 0.4%.
- The construction PMI recorded a rise to 61.70 in March, in the UK, compared to a level of 53.30 in the previous month. Markets were expecting the construction PMI to rise to a level of 54.60.
- In March, on a MoM basis, the CPI in Ireland rose 0.8%. In the previous month, the CPI had risen 0.4%.
- In February, on a MoM basis, the seasonally adjusted factory orders in Germany recorded a rise of 1.2%, at par with market expectations of a rise of 1.2%. In the prior month, factory orders had climbed by a revised 0.8%.
- In February, on a monthly basis, the PPI in the eurozone advanced 0.5%, less than market expectations for a rise of 0.6%. In the previous month, the PPI had climbed by a revised 1.7%.
- Number of initial jobless claims rose unexpectedly to 744.00K in week ended 03 April 2021, in US. In prior week, the seasonally adjusted number of initial jobless claims had recorded a revised reading of 728.00K.
- Eco Watchers Survey for the future outlook in Japan registered a drop to 49.80 in March. Eco Watchers Survey for the future outlook had recorded a reading of 51.30 in the prior month.
- In China, the CPI climbed 0.4% on an annual basis in March, more than market expectations for a rise of 0.3%. In the prior month, the CPI had fallen 0.2%.
CORPORATE UPDATES
SOUTH AFRICA
- Fortress REIT set to have R20.00bn in logistics parks by 2026: Fortress REIT, the JSE-listed real estate investment trust (REIT), is on track to have two thirds of its directly held property assets in high-end logistics, such as industrial parks, within the next three to five years, according to CEO Steve Brown.