Global Markets Rebound As European Corporate Earnings Offset Covid Worries; Oil Slip

22/04/2021 Global equities markets were firm on Wednesday as indications of a rebound in European corporate earnings offset concerns over rising Covid-19 infections in Asia that have dampened oil prices. Japan outperformed, while Australia and China had more modest gains. U.S. futures edged lower. Oil prices fell for a third day as U.S crude inventories rose 594,000 barrels last week, compared with analysts’ expectations for a draw of 2.985 million barrels. Brent crude futures fell 0.4% to $65.6 a barrel, while U.S. WTI crude futures were down 0.44% to $61.08 a barrel. Gold was up on Thursday morning, sticking around an eight-week high; thanks to a weaker dollar and falling U.S. Treasury yields. Gold futures inched up 0.04% to $1793.77.

The JSE gained 0.46% to 67,145 points, mainly led by miners, and the Top-40 was also up 0.46%. Precious metals rose 3.18%, listed property 1.23% and resources 0.97%. Impala led the gains in the precious metals sector, up 5.01% to R294.08 -rising miost in seven weeks. Northam added 3.56% to R275.98, DRDGold 3.4% to R15.51, Gold Fields 3.27% to R145.08, Sibanye-Stillwater 2.94% to R71.67. Consumer price inflation (CPI) rose to 3.2% in March on an annual basis, up from 2.9% the previous month, according to Stats SA on Wednesday. This is below the midpoint of the Reserve Bank’s 3%-6% target band (3.3%), leaving more scope for policymakers to keep rates lower for longer. The rand is on the backfoot 0.10% to R14.25/$ this morning. Tencent, in Hong Kong, is 1.97% upbeat.

NEWS:
• Zuma’s Legal Team Withdraws Before South African Graft Trial
• South Africa Inflation Muted on Low Underlying Price Pressures
• Pick n Pay’s New CEO to Target Discount Stores and Online Growth
EQUITY PREVIEW:
• South African Equities to Deliver Double-Digit Returns: Prudential
• South African Equities Attractive in the Short Term: Old Mutual
EARNINGS:
• 8am: Anglo American Platinum (AMS SJ), 1Q
• 8am: Clicks (CLS SJ), 1H
• 8am: Kumba Iron Ore (KIO SJ), 1Q
CENTRAL BANKS:
• 2:30pm: Reserve Bank Governor Lesetja Kganyago takes part in online discussion about the institution
• European Central Bank rate decision and President Christine Lagarde briefing on Thursday.

EU/UK/US
The pan-European STOXX 600 index rose 0.65; healthcare stocks gave the STOXX 600 its biggest boost. Swiss drug maker Roche jumped 3% after predicting a surge in demand for its drugs for the remainder of 2021. Hugo Boss jumped 6.7% to a one-year high, traders citing a media report of takeover interest in the company, including from French luxury goods maker LVMH. The DAX gained 0.44%, while London’s FTSE100 saw the session out 0.52% firmer. Headline consumer prices in the UK accelerated from 0.4% in February to 0.7% for March, undershooting the consensus estimate of 0.8%.

Wall Street stocks were in the green at the closing bell on Wednesday: the Dow and the S&P 500 were both up 0.93%, while the Nasdaq Composite was 1.19% firmer. Soccer stocks are in focus as Europe’s rebel Super League edges toward collapse following a public outcry. Six English Clubs, including Man United, pulled out of the project Tuesday. U.S index futures are hovering lower, giving back some gains on Thursday morning.

ASIA
China stocks slipped on Thursday, weighed by persistent worries over Sino-U.S. tensions, offsetting a series of upbeat corporate earnings in the first quarter. The CSI300 index fell 0.1%, while Japanese shares jumped as investors scooped up cyclical and chip-related shares after they fell sharply in the previous two sessions. The Nikkei225 jumped 1.99% and both Hang Seng and aASX200 are 0.46% and 0.58% in the green. MSCI’s ex. Japan rose 0.43%, following a 0.9% decline the previous day.