Daily Solutions – 12 October 2017

By Alexander Forbes Investments on Oct 12, 2017 in Market and Economic Commentary The news

JOHANNESBURG – The JSE maintained its momentum on Wednesday, stretching its winning streak to a ninth consecutive session. Interest rate sensitive stocks, including banks and retailers, were well supported, as the rand rebounded from its recent lows to the dollar and other hard currencies. Shares of diversified industrial group Barloworld reached levels last seen in 2007, before the global financial crisis, as the rand recovered through R13.60/$, from lows of R13.86 at the start of the week. Barloworld and Imperial are sensitive to the rand through their vehicle dealership businesses. Imperial touched R200 a share, which was near its recent highs. Bargain-hunting in recently sold-down mid-cap stocks was in play, complementing modest gains in the large-cap stocks, that tend to influence the broader market. Mondi was biggest loser among the blue-chip companies, dropping 7.48% to R347.02, following a quarterly report in which it said it recorded an 8% rise in its underlying operating profit for the third quarter. The share was up 0.29% to 57,794.30 points at lunchtime, marking a record high and bringing gains over the past nine sessions to 4%. Global equity markets were mixed on the day, although a number of them were at historic highs.

US MARKETS – U.S. stocks closed higher on Wednesday after the Federal Reserve released a summary from its previous meeting that showed it believes the economy is strong enough to withstand another rate hike in December. the Dow Jones industrial average rose 40 points and finished at a record of 22,872.89, with Johnson & Johnson contributing the most to the gains. The S&P 500 also posted a record close, rising 0.2 percent to 2,555.24, with real estate leading advancers. The Nasdaq composite gained 0.25 percent to finish at an all-time closing high of 6,603.55. The minutes showed that a December interest-rate hike is all but certain despite low inflation levels, most market participants were already expecting a rate hike in December.

EUROPEAN MARKETS – European stocks closed mixed on Wednesday afternoon, as investors continued to monitor ongoing political uncertainty. The pan-European Stoxx 600 closed flat with most sectors and major bourses in negative territory. Basic resources stocks were the worst performing on Wednesday, down over 1 percent amid guidance cuts. South African firm Mondi reported third-quarter underlying profit had risen 8 percent, citing better-than-expected average selling prices. However, the Johannesburg-listed company said its yearly performance was set to be modestly below market expectations. Its shares were more than 7.6 percent lower. Spain’s IBEX recovered from losses it sustained in the previous session and finished around 1.2 percent higher.

ASIAN MARKETS – A broad index of Asian shares touched a decade high on Wednesday, taking cues from signs of confidence in the U.S. Meanwhile, the euro held onto overnight gains after Catalonia held back on an outright declaration of independence. During the morning, the MSCI Asia Pacific ex-Japan index touched its highest levels since 2007 as major indexes across the region recorded gains. As of 4:10 p.m. HK/SIN, it was just off those levels, trading 0.33 percent higher for the day. Japan’s Nikkei 225 reversed early losses to close up 0.28 percent, or 57.76 points, at 20,881.27 — a two-decade high, Reuters said. Bluechip automakers were pressured, but most tech names held above the flat line: Toyota fell 0.97 percent, Mazda Motor sank 1.99 percent and Softbank Group finished the session 0.39 percent higher.


Alexander Forbes Investments

Alexander Forbes Investments

Alexander Forbes Investments was established in 1997. We are a forward-thinking and trusted global investment provider, with roots in Africa. In pursuit of certainty we set out to understand our retail and institutional clients’ circumstances and risk tolerance to set clear goals. Our adaptive investment approach, called Living*Investing allows us to maximise opportunity and minimise risk at every stage of the investment cycle.

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