JOHANNESBURG - The JSE closed higher on Wednesday as markets reacted favourably to the government’s promise to protect the integrity of public finances.
Despite a generally stronger greenback‚ the rand gained on news that inflation decelerated in January‚ while Finance Minister Malusi Gogaba announced the budget deficit would be steadily reduced over the next three years.
After trading flat at midday‚ the local bourse climbed 1.17 percent to close at 58‚606 points‚ while the top 40 gained 1.39 percent. Food and drug retailers rose 3.53 percent, banks 2.39 percent and industrials 1.66 percent. Gold miners lost 0.48 percent and resources 0.28 percent.
The budget‚ along with recent positive political developments‚ would help avoid further credit-ratings downgrades‚ said Absa Asset Consulting acting head Kwaku Koranteng.
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Earlier‚ it was announced that inflation‚ measured by the annual change in the consumer price index (CPI)‚ slowed to 4.4 percent in January from 4.7 percent in December. This beat a Trading Economics consensus forecast of 4.5 inflation‚ measured by the annual change in the consumer price‚ increasing the outlook for an interest-rate cut in March.
A firmer rand and the lower inflation print lifted banks and food and drug retailers‚ although market heavyweight Naspers once again provided the market with the most direction‚ adding 3.93% to R3‚362.90.
Gold miners were under pressure from a generally stronger dollar‚ with the market also waiting for the release of the minutes of the US Federal Reserve open market committee’s January meeting. Gold is seen as a hedge against loose monetary policy.
The session was busy in terms of corporate news‚ with notable releases including Assore and Tiger Brands.
Tiger Brands fell 5.83 percent to R424.40‚ after earlier warning that revenue in the four months to end-January had declined 5 percent compared with the previous corresponding period.
Diversified miner Assore surged 11.74 percent to R328.63‚ after earlier raising its interim dividend 67 percent to R10 per share for the period to end-December.
Diversified miner Glencore gained 3.02 percent to R65.25‚ after earlier reporting a 49% increase in cash generated from operations in the year to end-December.
Capitec Bank jumped 6.69 percent to R876‚ while FirstRand gained 3.07 percent to R75.20.
Shoprite added 3.98 percent to R250 and Clicks 2.11 percent to R169.
Resilient firmed 3.71 percent to R78 and Fortress B 3.87 percent to R18.
Capital and Counties lost 4.65 percent to R43.72 after earlier reporting a 1.7 percent decrease in net asset value per share to £3.34 in the year to end-December‚ compared with the year previously.
Adcock Ingram added 2.75 percent to R70.90‚ after earlier reporting a 33 percent increase in first-half headline earnings per share (HEPS) in the six months to end-December.
Bid Corporation rocketed 6.89 percent to R282.38‚ after earlier reporting that revenue in the six months to end-December grew 8 percent compared with the prior period.
Woolworths lost 0.33 percent to R64.21 ahead of the release of its interim results to end-December on Thursday. The retailer said previously it expected HEPS for the period to decline by between 12.5 percent and 17.5 percent‚ having re-assessed the value of its David Jones assets‚ amid poor performance in the Australian retail sector.
Anglo American gained 1.64 percent to R288.66‚ ahead of the release of its full-year results to end-December. In the prior period, Anglo declared HEPS of US1.47c.
Shortly after the JSE closed the Dow was up 0.32 percent to 25‚044.98 points‚ while European markets were mixed. The Dax 30 was off 0.39percent‚ while the FTSE 100 had gained 0.43 percent.
At the same time, platinum was off 0.17 percent to $998.59 an ounce, while gold had added 0.19 percent to $1‚331.74. Brent crude was flat at $65.05 a barrel.