CPI data sends retailers soaring

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Cape Town – The local bourse continued to struggle to find direction in
early trade on Tuesday after US markets closed the day weaker on Monday
evening, heightened by concerns of a FED rate hike this week. 

President Trump’s rhetoric remains a
significant catalyst in the swings we have seen on international markets as
nations brace for an impending “trade war” with the US.

Data breaches at
Facebook [NYSE:FB],  saw the social media
giant shedding 7% on the day.

The local unit was steady on, despite better than expected
inflation numbers that were released by Stats SA earlier in the day. 

The year on year inflation rate came in at 4%
for the month of February, beating market expectations as the market
anticipated inflation to increase by 4.2% in the reviewed period.

The strong
inflation numbers could create a state of quagmire for the MPC as the SARB would
be inclined to cut interest rates in an environment where other economies are
entering a rate hiking cycle.

The SARB will be left with very few options if
inflation declines towards the floor of the SARB inflation band of 3%.  A rate cut could see a flight of capital from
South African shores as international investors seek higher yields. The rand traded at an
intra-day low of R12.03/$.

Truworths[JSE:TRU],
MR Price [JSE:MRP]  and The Foschini
Group [JSE:TFG],  lead the pack on the JSE
Top-40 notching up gains of 6.26%, 5.01% and 4.1% respectively.  Embattled Tiger Brands, [JSE:TBS] closed the
day up 4.23% recording its first positive close since the outbreak of
listeriosis in their Polokwane  factory.

Steinhoff International [JSE:SNH] remains under pressure as rumours around the liquidity
of the business intensify.  The former
global retail giant has had a fire sale with assets flying out of the window in
a bid to shore up the balance sheet.

The retailer exited the Top 40 index this
weak and has not been finding it easy in its new surrounds. The retailer closed
the day down 8.74% to trade at 355c a share. 
The local listed REITS dominated the losers today with Fortress
[JSE:FFB] closed the day down 9.41%, whilst Resilient [JSE:RES], Sirius [JSE:SRE] and Growth point shed
6.58%, 5.23% and 3.29% respectively.

The JSE ALL-Share Index closed the day firmer at 58 288
points, whilst the JSE Top- 40 index closed the day up 180 points to trade at
51 615 on the day. The resource index failed to recover losing 0.13%, whilst the
Industrial Index closed up 0.75. However, the Financial index chalked up a loss of
0.11%.

Brent crude advanced on Tuesday as geopolitical tensions in
the Middle East sent panic in the market with the commodity soaring to its
highest level since late February. 
Speculation of further output cuts from Venezuela sent more jitters in
the markets which saw a barrel of crude changing hands at $67. Saudi Arabia
described the Iran deal as a “flawed deal” ahead of the Crown Prince’s meeting
with Donald Trump on Tuesday.

Gold was weaker on the day, as the yellow metal slid to
$1 309/Oz as at 17:00 CAT. The market will have a keen eye on the developments
in the Middle East and Wednesday evening’s FED interest rate announcement.

Platinum continued to trade softer on Tuesday, as pressure on
metal prices intensified towards the close of the South African market. At the time of writing, platinum was trading
at $942.8/ounce, whilst palladium faced a similar fate, easing lower to
trade at $982/ounce.

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