Market review, commodities, currencies & corporate update - 29.03.21

  • Market Overview

SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the green on Friday, buoyed by broad based gains in platinum mining and banking sector stocks and as better-than-expected global economic data lifted investor sentiment.
  • Platinum miners, Northam (JO: NHMJ ) Platinum, Anglo American (JO: AMSJ ) Platinum and Impala Platinum (JO: IMPJ ) Holdings surged 6.1%, 5.1% and 3.7%, respectively.
  • Banking firms, Investec, Capitec Bank (JO: CPIJ ) Holdings and Nedbank Group (JO: NEDJ ) rose 4.0%, 3.4% and 3.2%, respectively.
  • Further, gold miners, Harmony Gold Mining and Gold Fields (JO: GFIJ ) added 3.6% and 0.7%, respectively.
  • The JSE All Share index advanced 3.2% to close at 66,833.99.

UK MARKET REVIEW

  • The UK market finished firmer on Friday, boosted by gains in mining sector stocks and following the release of encouraging UK retail sales data.
  • Glencore (LON: GLEN ), Antofagasta (LON: ANTO ) and Anglo American (JO: AGLJ ) rose 6.5%, 4.4% and 4.3%, respectively.
  • Smiths Group (LON: SMIN ) surged 6.9% after it increased its interim dividend and stated that it was confident about meeting expectations for its FY21 results.
  • Oil companies, BP (LON: BP ) and Royal Dutch Shell (LON: RDSa ) gained 3.1% and 2.1%, respectively, as oil prices rose amid concerns that a ship blocking the Suez Canal could squeeze crude supplies.
  • The FTSE 100 index advanced 1.0% to close at 6,740.59.

US MARKET REVIEW

  • US markets ended higher on Friday, amid hopes of a recovery that is expected to deliver the fastest domestic economic growth since 1984.
  • Banking firms, Bank of America (NYSE: BAC ), Citigroup (NYSE: C ) and JPMorgan Chase (NYSE: JPM ) rose 2.7%, 1.8% and 1.7%, respectively.
  • L Brands (NYSE: LB ) rose 3.7%, after the company raised its 1Q21 profit forecast for the second time this month as it benefits from consumers spending their stimulus checks and relaxation of COVID-19 restrictions.
  • The S&P 500 index rose 1.7% to settle at 3,974.54, while the Dow Jones Industrial Average index advanced 1.4% to close at 33,072.88.
  • The NASDAQ index climbed 1.2% to end the trading session at 13,138.72.

ASIA MARKET REVIEW

  • Asian markets are trading higher this morning, tracking Friday’s gains on Wall Street.
  • In Japan, Nomura Holdings (T: 8604 ) has plunged 15.2%, after the company flagged a potential $2.00bn loss at a US subsidiary.
  • In Hong Kong, market heavyweight, Tencent Holdings (HK: 0700 ) has dropped 0.5%.
  • In South Korea, technology company, LG Electronics (KS: 066570 ) has declined 1.1%. Further, peer, SK Hynix (KS: 000660 ) has dropped 1.5%.
  • The Nikkei 225 index is trading 1.0% higher at 29,472.28.
  • The Hang Seng index is trading 0.3% firmer at 28,411.09, while the Kospi index is trading 1.0% higher at 3,044.15.

COMMODITIES

  • At 06:00 SAST today, Brent spot prices fell 0.7% to trade at $63.25/bl. Meanwhile, efforts continued to dig out the giant container ship clogging the Suez Canal.
  • On Friday, Brent spot prices rose 4.4% to settle at $63.69/bl, on worries that global supplies of crude and refined products could be disrupted for weeks as workers try to dislodge a giant container ship blocking the Suez Canal. In contrast, Baker Hughes reported that the number of active US oil drilling rigs rose by 6 to 324 for the week ended 26 March. Further, Yemen’s Houthi forces stated that they launched attacks on facilities owned by Saudi Aramco (SE: 2222 ).
  • On Friday, the Illinois North Central No.2 Yellow corn spot prices ended steady at $5.40/bushel.
  • At 06:00 SAST today, gold prices marginally declined to trade at $1,732.12/oz. On Friday, gold gained 0.3% to close at $1,732.52/oz, as the greenback lost ground.
  • On Friday, copper rose 2.1% to close at $8,967.00/mt. Aluminium closed 2.5% higher at $2,275.75/mt.

CURRENCIES

  • On Friday, the South African rand strengthened against the US dollar. In the US, consumer spending fell by the most in 10 months in February, as a cold snap gripped many parts of the country and the boost from a second round of stimulus checks to middle- and lower-income households faded. Also, personal income tumbled less than expected in February. On the other hand, US consumer sentiment continued to improve in late March to a one-year high, as more Americans got coronavirus vaccinations and business restrictions eased in many states.
  • The yield on benchmark government bonds fell on Friday. The yield on 2026 bond fell to 7.49%. Further, the yield on 2023 bond declined to 5.35%, while that for the longer-dated 2030 issue fell to 9.49%.
  • At 06:00 SAST, the US dollar is trading 0.1% higher against the South African rand at R14.9923, while the euro is trading 0.1% higher at R17.6733. At 06:00 SAST, the British pound has marginally gained against the South African rand to trade at R20.6631.
  • On Friday, the euro declined against most of the major currencies. Business morale in Germany is higher in March than it has been in almost two years, as rising demand for manufactured goods keeps factories in Europe’s largest economy humming despite the COVID-19 pandemic and lockdown restrictions.
  • At 06:00 SAST, the euro marginally slipped against the US dollar to trade at $1.1789, while it has marginally gained against the British pound to trade at GBP0.8553.

ECONOMIC UPDATES

  • In February, retail sales in the UK rose 2.1% on a monthly basis, meeting market expectations of an advance of 2.1%. In the prior month, retail sales had dropped by 8.2%.
  • In 4Q20, on an annual basis, the final gross domestic product ( GDP ) in Spain recorded a drop of 8.9%, less than market expectations for a fall of 9.1%. In the previous quarter, GDP had dropped 9.04%. The preliminary figures had recorded a drop of 9.1%.
  • Compared with a revised level of 99.50 in the prior month, the business confidence index advanced unexpectedly to 101.20 in Italy, in March.
  • The consumer confidence index in Italy registered a drop to 100.90 in March, compared with a reading of 101.40 in the prior month. Market anticipations were for the consumer confidence index to fall to 100.70.
  • ISTAT has reported that, compared with a revised level of 93.30 in the prior month, the economic sentiment index recorded a rise to 93.90 in March, in Italy.
  • The Ifo business climate index advanced to 96.60 in Germany, in March, higher than market expectations of an advance to a level of 93.20. The Ifo business climate index had registered a revised reading of 92.70 in the previous month.
  • The Ifo current assessment index in Germany recorded a rise to 93.00 in March, compared with a level of 90.60 in the previous month. Market expectations were for the Ifo current assessment index to climb to 91.30.
  • In March, the Ifo business expectations index recorded an unexpected rise to 100.40 in Germany. In the previous month, the Ifo business expectations index had registered a revised level of 95.00.
  • Preliminary the seasonally adjusted wholesale inventories climbed 0.5% in the US on a monthly basis, in February. The wholesale inventories had climbed by a revised 1.4% in the previous month.
  • Advance goods trade deficit in the US widened to $86.72bn in February, compared with an advance goods trade deficit of $84.58bn in the prior month.
  • Personal spending in the US dropped 1.0% on a MoM basis in February, higher than market expectations of a drop of 0.7%. Personal spending had registered a revised rise of 3.4% in the previous month.
  • Personal income fell 7.1% in the US on a monthly basis in February, compared with a revised rise of 10.1% in the previous month. Market anticipations were for personal income to fall 7.3%.
  • In February, on a monthly basis, personal consumption expenditure deflator recorded a rise of 0.2% in the US, compared with a rise of 0.3% in the previous month. Market anticipations were for personal consumption expenditure deflator to climb 0.1%.
  • The final Reuters/ Michigan consumer sentiment index in the US advanced to 84.90 in March, more than market expectations for an advance to 83.60. The preliminary figures had recorded an advance to 83.00. In the prior month, the Reuters/Michigan consumer sentiment index had registered a reading of 76.80.

CORPORATE UPDATES

SOUTH AFRICA

  • Gold on track for first weekly decline in three: Gold prices were flat, as lower US yields and worries about the global economic recovery following a surge in Covid-19 cases across Europe countered a rising dollar, although bullion was still on course for its first weekly decline in three.

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