JSE. Picture: MARTIN RHODES
JSE. Picture: MARTIN RHODES

THE JSE started the week on a firm note as the market followed stronger European and US markets with resources clear favourites.

At 5pm the all share closed 0.35% higher at 49,112.80 points and the blue-chip top 40 had risen 0.50%. Resources had lifted 2.43% and financials 0.26%, while banks were flat (0.09%). The gold index shed 2.25% and platinums lost 1.01%.

European markets were higher, despite latest purchasing managers index (PMI) data released on the day indicating more severe deflationary tendencies. eurozone flash composite PMIs surprised to the downside in February, dropping to 52.7 (-0.9), a 13-month low.

The FTSE was up 1.75% at the JSE’s close after the pound fell drastically after London mayor Boris Johnson announced he would campaign for Britain to leave the European Union (EU).

The CAC 40 had risen 1.76% and the Dax was 1.83% higher.

Friday’s US inflation release was stronger than expected, which raised the odds for further interest-rate increases in the US this year. US markets ended Friday mixed with the Dow Jones losing 0.13%. It opened 1.17% higher on Monday.

Oil prices were sharply higher on Monday, which will probably cause US inflation to pick up later in the year, supporting a rate-hiking stance by the US Fed. At the JSE’s close the Brent crude price was 4.69% higher at $34.62 a barrel.

Foreigners sold a further net R2.1bn worth of South African equities last week, which meant that nonresidents had reduced their exposure to the JSE by R11bn this month and R21bn this year so far. Even though bond portfolio outflows had stabilised, overall portfolio outflows had remained substantial due to persistent equity-market selling pressure, Barclays Research analysts said.

Counterpoint Asset Management analyst Sarah Golding said a stronger Chinese market and the prospect of further stimulus by the European Central Bank (ECB) supported global equity markets over the past week. "However, oil remains on its volatile path."

European markets were expected to remain choppy after the decision by British prime minister David Cameron to call a referendum on June 23 to determine if Britain should remain in the EU.

Locally the market was eyeing Wednesday’s budget. Ms Golding said finance minister Pravin Gordhan would deliver the most crucial budget since democracy in the country.

"Much needs to be done to convince ratings agencies that the government has spending under control and that it has the ability to stimulate growth," Ms Golding said.

Among resources shares, Anglo American ended the day 6.70% higher at R102.35, the first time since November last year that its shares have closed above R100.

Glencore leapt 7.83% to R27.81 and iron ore producer Kumba jumped 7.33% to R65.

Among rand hedges SABMiller softened 2.17% to R896.60. The rand firmed 1.3% against the greenback on the day.

AngloGold Ashanti saw its share price fall nearly 4% in intraday trade, before recovering by the close to finish 0.19% up at R170.37. The gold miner earlier reported its full-year loss deepened to $85m as gold output fell 11% due to safety stoppages, asset sales and suspensions.

Diamond producer Trans Hex tumbled 5.26% to R2.70 after announcing on Monday it had cut its workforce at its ageing Lower Orange River mines by nearly a quarter, as it switched to a reduced operational cycle at the Baken and Bloeddrif assets.

Among banks, FirstRand shed 0.87% to R45.84, but Standard Bank gathered 0.55% to R113.97.

Discovery lost 2.88% to R118.89.

Steinhoff firmed 1.14% to R79.70 after confirming it had approached the British Home Retail Group regarding a possible 175p a share cash offer.

Among property stocks Redefine Properties climbed 1.46% to R10.39.

MTN was 1.79% higher at R128.25.