THE JSE closed firmer on Thursday as more positive global sentiment on a Brexit outcome supported risk assets while further political turmoil rocked the UK.
Platinum shares were the main gainers after the platinum price firmed during the day. At the JSE’s close, the spot price was 1.4% higher at $1,015.74 a fine ounce.
The market appeared to benefit from a stronger rand following a far larger than expected trade surplus of R18.7bn in May after a revised R127m deficit (revised from a surplus of R431m) in April. A surplus of R3bn had been expected. Exports increased 14%, while imports fell 6.6%.
Rand hedges retreated in late trade, but banks and financials were strong gainers on the day.
Prominent "leave" campaigner Boris Johnson unexpectedly announced he would not stand for the leadership of the Conservative Party after his fellow-campaigner Michael Gove announced his candidacy. Home Secretary Theresa May is now the favourite to win the leadership race to replace incumbent David Cameron, who resigned in the wake of the Brexit vote.
In total, there were five candidates, two of whom supported the "remain" campaign and three who supported the decision to leave the EU, Barclays Research said in a note.
"Given that May supported the ‘remain’ campaign during the recent EU referendum, the possibility exists that, should she win the leadership contest, this may make for a more amicable relationship between the next UK government and the EU27 leaders," Barclays said.
The JSE all share closed 0.63% higher at 52,217.70 points and the blue-chip top 40 added 0.53%. Platinums gained 2.39% and general retailers added 1.4%. Banks firmed 1.23% and financials gained 1.14%. Resources were up 0.41% but the gold index slipped 0.33%.
The Dow Jones industrial average was 0.36% higher at the JSE’s close as the FTSE 100 had added 0.60% and the Paris CAC 40 had firmed 0.47%. The German Dax was just 0.10% firmer.
Capital Economics chief global economist Julian Jessop said globally equity markets had rebounded after the Brexit vote amid new views that Brexit might not even actually happen.
He said it had been suggested that the UK would remain a member of the EU after all in a form of "Brexit-lite", where the UK formally leaves the EU but has some sort of associate membership that replicates most of the current economic ties.
This view was strengthened yesterday after May said Article 50 to trigger the exit may not be activated this year. However, EU leaders previously said that they wanted a quick activation of Article 50 to reduce uncertainty.
"There is a growing recognition that Brexit need not be the disaster that many feared," Jessop said.
He said markets had also been supported by expectations of a longer period of loose monetary policy in the UK and elsewhere, including in the US where the futures market for December now implied no interest rate hikes this year.
Among individual shares on the JSE, Anglo American gained 1.77% to R141 and Kumba Iron Ore rocketed 7.24% to R111.
British American Tobacco added 0.13% to R934.24 while Richemont dropped 0.62% to R84.73.
Anheuser-Busch InBev added 1.91% to R1,905.31 but SABMiller retreated 2.06% to R847.52.
Barloworld firmed 4.99% to R73.15.
In the banking sector, Nedbank softened 0.05% to R186.40 but Standard Bank climbed 1.03% to R127.80. Barclays Africa rebounded 1.31% to R144.08.
Old Mutual was up 1.64% to R38.45.
Clicks climbed 3.54% to R122.70, despite trading ex-dividend.
Among property stocks, Resilient added 1.5% to R131.80 while Rockcastle shed 0.66% to R34.51.
Remgro firmed 0.95% to R254.66.
