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Market Review, Commodities, Currencies, Economic & Corporate Update - 06.06.24

Published 2024/06/06, 08:58
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SOUTH AFRICA MARKET REVIEW

  • South African markets closed in the red yesterday, driven by losses in financial sector stocks.
  • Banks, FirstRand (JO:FSRJ), Nedbank Group (JO:NEDJ), Standard Bank Group (JO:SBKJ), Absa Group (JO:ABGJ) and Investec (JO:INLJ) fell 3.3%, 3.2%, 2.4%, 2.3% and 1.9%, respectively.
  • Insurance companies, Discovery, Old Mutual (JO:OMUJ), Momentum Metropolitan Holdings (JO:MTMJ) and Sanlam (JO:SLMJ) declined 3.3%, 2.5%, 1.6% and 1.2%, respectively.
  • Retailers, Mr Price Group (JO:MRPJ), Shoprite (JO:SHPJ), Truworths International (JO:TRUJ), Pepkor Holdings (JO:PPHJ), Clicks Group (JO:CLSJ) and Spar Group (JO:SPPJ) dropped 3.1%, 2.5%, 2.2%, 2.0%, 1.8% and 1.6%, respectively.
  • On the flipside, gold miners, Gold Fields (JO:GFIJ), AngloGold Ashanti (JO:ANGJ), DRD Gold (JO:DRDJ) and Harmony Gold Mining Co. (JO:HARJ), advanced 3.3%, 2.7%, 2.6% and 2.4%, respectively.
  • The JSE All Share index closed marginally lower at 76,829.13.

UK MARKET REVIEW

  • The UK market finished firmer yesterday, as investors evaluated the global interest rate outlook.
  • Pharmaceutical companies, GSK (LON:GSK) and AstraZeneca (LON:AZN) gained 2.2% and 0.9%, respectively.
  • Mining companies, Fresnillo (LON:FRES), BHP Group (JO:BHPJ) and Antofagasta (LON:ANTO) added 1.6%, 0.8% and 0.7%, respectively.
  • On the contrary, retailer, B&M European Value Retail (LON:BMEB) edged down 7.3%, despite the company reporting double digit growth in annual operating profits and sales, driven by the opening of 78 gross new stores across the group, with earnings at the top end of its guidance.
  • Peers, JD Sports Fashion (LON:JD), Next (LON:NXT) and Frasers Group (LON:FRAS) shed 4.6%, 1.7% and 1.2%, respectively.
  • The FTSE 100 index added 0.2% to close at 8,246.95.

US MARKET REVIEW

  • US markets closed in the green yesterday, supported by gains in technology sector stocks.
  • Technology company, Hewlett Packard Enterprise NYSE:HPE) climbed 10.7%, after projecting higher revenues in 3Q24, driven by upbeat demand for its AI servers.
  • Peer, Intel (NASDAQ:INTC) gained 2.5%, following buyout firm Apollo Global Management (NYSE:APO) agreed to purchase a 49.0% equity interest for $11.00bn in a joint venture related to the chipmaker's Ireland manufacturing unit.
  • On the other hand, discount store company, Dollar Tree (NASDAQ:DLTR) shed 4.9%, after the announcing it would explore options including a potential sale or spinoff of Family Dollar and issued a disappointing quarterly profit forecast.
  • The S&P 500 index gained 1.2% to settle at 5,354.03, while the DJIA index added 0.2% to close at 38,807.33.
  • The NASDAQ index advanced 2.0% to end the trading session at 17,187.90.

ASIA MARKET REVIEW

  • Asian markets are trading mostly higher this morning, in anticipation of rate cuts by the European Central Bank (ECB).
  • In Japan, telecommunications company, Fujikura (TYO:5803) has risen 3.6%.
  • On the flipside, employment agency company, Recruit Holdings Co. (TYO:6098), has shed 1.9%.
  • In Hong Kong, glass manufacturing company, Xinyi Glass Holdings (HK:0868) has added 3.3%.
  • On the other hand, pharmaceutical company, Wuxi Biologics (HK:2269) has eased 1.0%.
  • In South Korea markets are closed on account of a public holiday.
  • Yesterday, the Kospi index advanced 1.0% to close at 2,689.50.
  • Today, the Nikkei 225 index is trading 0.9% higher at 38,841.75.
  • The Hang Seng index has advanced 0.7% to trade at 18,547.56.

COMMODITIES

  • At 05:30 SAST today, Brent prices rose 0.4% to trade at $78.73/bl.
  • Yesterday, Brent prices rose 1.1% to settle at $78.41/bl, fueled by rising expectations for a rate cut by the US Fed in September. Meanwhile, the US Energy Information Administration (EIA) reported that US crude inventories increased by 1.23mn bls in the week ended 31 May 2024.
  • At 05:30 SAST today, gold prices advanced 0.6% to trade at $2,369.73/oz. Yesterday, gold gained 1.3% to close at $2,354.85/oz, amid a drop in the US Treasury yields.
  • Yesterday, copper declined 0.9% to close at $9,766.65/mt. Aluminium closed 1.1% lower at $2,631.00/mt.

CURRENCIES

  • Yesterday, the South African rand weakened against the US dollar. In South Africa, the business confidence index increased in 2Q24. Meanwhile, in the US, the number of mortgage applications fell in the week ended 31 May 2024. Moreover, ADP employment dropped to a four-month low in May, with small firms reducing staff. Further, the ISM services PMI rebounded in May.
  • The yield on benchmark government bonds were higher yesterday. The yield on the 2030 bond rose to 10.68%, while that for the longer-dated 2040 issue advanced to 12.90%.
  • At 05:30 SAST, the US dollar is trading 0.1% lower against the South African rand at R18.9039, while the euro is trading marginally lower at R20.5916. At 05:30 SAST, the British pound has declined 0.1% against the South African rand to trade at R24.2007.
  • Yesterday, the euro mostly declined against most of the major currencies. In Germany, service activity accelerated in May. In the eurozone, the services PMI rose less than expected in May.
  • At 05:30 SAST, the euro advanced 0.2% against the US dollar to trade at $1.0894, while it has gained 0.1% against the British pound to trade at GBP0.851.

ECONOMIC UPDATES

  • In South Africa, the business confidence index climbed to a level of 35.00 in 2Q24. In the previous quarter, the business confidence index had recorded a level of 30.00.
  • In South Africa, the S&P Global PMI unexpectedly climbed to a level of 50.40 in May, compared to a level of 50.30 recorded in the previous month.
  • In Spain, the services PMI unexpectedly advanced to a level of 56.90 in May. The services PMI had recorded a level of 56.20 in the previous month.
  • In Italy, the services PMI recorded a drop to a level of 54.20 in May, compared to a level of 54.30 recorded in the previous month.
  • In France, the final services PMI declined to a level of 49.30 in May, higher than market expectations for a fall to a level of 49.40. In the prior month, the services PMI had recorded a reading of 51.30.
  • In Germany, the final services PMI advanced to a level of 54.20 in May, compared to a level of 53.20 recorded in the previous month. Markets were expecting the services PMI to rise to a level of 53.90.
  • In the eurozone, the final services PMI unexpectedly fell to a level of 53.20 in May, compared to a reading of 53.30 in the prior month,
  • In the UK, the final services PMI eased to a level of 52.90 in May, compared to a reading of 55.00 in the previous month. Market expectations were for the services PMI to drop to a level of 52.90.
  • In the eurozone, the producer price index (PPI) eased 1.0% on a MoM basis in April. The PPI had declined by a revised 0.5% in the prior month.
  • In the US, the MBA mortgage applications recorded a drop of 5.2% in the week ended 31 May 2024. In the previous week, the MBA mortgage applications had dropped 5.7%.
  • In the US, the ADP employment rose by 152.00K in May, less than market expectations and compared to revised rise of 188.00K jobs recorded in the prior month.
  • In the US, the final Markit services PMI advanced to a level of 54.80 in May, compared to a level of 51.30 in the prior month. Markets were anticipating Markit services PMI to advance to a level of 54.80.
  • In the US, the ISM Services Index registered a rise to a level of 53.80 in May, more than market expectations for an advance to a level of 50.80. In the previous month, the ISM Services Index had registered a level of 49.40.
  • The Bank of Canada (BoC) slashed its interest rate by 25 basis points to 4.75%, at par with market expectations.

CORPORATE UPDATES

SOUTH AFRICA

  • Ninety One Limited (JO:NY1J): The asset management company, in its annual results for the year ended 31 March 2024, revealed that net revenue eased to GBP588.50mn compared to GBP627.10mn recorded in the prior year. Its diluted EPS stood at 18.30p compared to 18.10p recorded in the prior month.
  • Vukile Property Fund Limited (JO:VKEJ): The real estate investment trust company, in its FY24 results, reported that group property revenue rose to R4.02bn from R3.59bn posted in the previous year. Its basic and diluted EPS fell 22.7% from the prior year to 152.27c.
  • Nvidia (NASDAQ:NVDA) overtakes Apple (NASDAQ:AAPL) to become world’s second-most valuable listed company: Shares of Nvidia rallied to record highs, with the artificial intelligence (AI) chipmaker’s stock market valuation hitting above the $3-trillion mark and overtaking Apple to become the world’s second-most valuable listed company.

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