Retailers rally on better data
Retailers, miners and listed property led gains on the JSE on Wednesday, with retailers lifted by betterthan-expected data in the sector. Truworths added 2.96% to R50.49, Massmart 2.04% to R54.92 and Woolworths 1.54% to R51.36. Globally, investors shrugged off a higher-than-forecast acceleration in US inflation to focus on the global recovery.
Retailers, miners and listed property led gains on the JSE on Wednesday, with retailers lifted by better-thanexpected data in the sector.
Stats SA said that retail sales, an indication of the health of consumers, showed a 6.9% increase in February from the previous month and a 2.3% increase from the same month in 2020.
A fall in Covid-19 infections and the end of liquor-sales bans led to more consumer spending, with other main drivers in February being purchases of furniture, appliances, equipment, and clothing and leather goods.
“Notwithstanding February’s notable improvement, retailers continue to face a myriad operational challenges, including persistent supply chain disruptions, impacting prices. Additionally, many smaller independent retailers have been forced to close their doors owing to aggressive competition from large chain stores,” said Investec economist Lara Hodes.
“Moreover, household balance sheets remain under pressure and consumer confidence is still subdued. A third wave as we head into winter remains a substantial risk, as we have seen in other countries,” she said.
The JSE all share gained 1.1% to 67,812 points and the top 40 1.14%. Industrial metals rose 2.51%, resources 1.77%, listed property 2.03% and retailers 1.06%.
Steinhoff rose the most in almost three weeks, up 6.34% at R2.18. Motus Holdings added 3.31% to R98.46, Truworths 2.96% to R50.49, Massmart 2.04% to R54.92 and Woolworths 1.54% to R51.36.
Globally, investors shrugged off a higher-than-forecast acceleration in US inflation to focus on the global economic recovery.
US inflation accelerated to 2.6%, a two-year high, with many analysts believing that the data is unlikely to change US Federal Reserve chair Jerome Powell’s view that higher inflation in the coming months will be transitory.
Concern about some Covid-19 vaccines remains, which may affect rollout programmes. The US, EU and SA have decided to temporarily halt the administration of the Johnson & Johnson (J&J) vaccine due to a few incidents of severe blood clotting.
“I think the market remains a bit unsure about what to make out of the J&J situation. It’s worth considering that easy-to-store vaccines, such as AstraZeneca and J&J, are critical in terms of the global programme to counter Covid-19 spread,” said Axi chief global markets strategist Stephen Innes.
At 6pm, the Dow Jones industrial was 0.66% firmer at 33,900 points.
At the same time, the rand had firmed 0.75% to R14.3944/$, 0.63% to R17.2377/€ and 0.48% to R19.8583/£. The euro was 0.21% firmer at $1.1973.