Daily Market Overview 30 September 2021

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Local Market Update

– Johannesburg-listed shares rose on Wednesday on investor confidence that China will contain a power crunch and property developer Evergrande’s debt problems. The All-share index closed up 0.91% at 64,364 points while the blue-chip Top-40 index ended up 0.97% at 58,022 points. The stock market was lifted by local economy-driven stocks such as financials as well as miners, but listed property shares posted losses.

– The rand dropped on Wednesday as the dollar advanced on increased expectations that the U.S. Federal Reserve will tighten monetary policy. At the end of the session, the rand was 0.45% softer versus the dollar as it traded around the R14.18 mark. There will be a flurry of domestic economic data releases today, including August credit numbers, producer price inflation and trade figures.

– Gold prices inched up this morning but hovered near a seven-week low, constrained by a strong dollar and expectations of the U.S. Federal Reserve winding down stimulus measures soon. Meanwhile, oil prices fell earlier today, extending losses after official figures showed an unexpected rise in inventories in the United States although prices seem to have stabilised following a recent run of gains. U.S. oil and fuel stockpiles increased last week, the U.S. Energy Department’s Energy Information Administration (EIA) said on Wednesday.

In Local news

Government must ‘bite the bullet’ and make a decision on e-tolls, says Sanral CEO
Sanral CEO Skhumbuzo Macozoma has called on the government to “bite the bullet” and take a decision on the e-toll scheme on the Gauteng Freeway Improvement Project (GFIP). “There are no easy answers. All the options we have presented to government have very significant financial implications and I think we must just make a decision,” Macozoma said at the Consulting Engineers South Africa (Cesa) Infrastructure Indaba on Wednesday. “Bite the bullet and do so. There is not going to be an answer that is not going to affect South Africans in the pocket, including cancellation.

Embezzled health funds dent SA’s anti-graft stance
South African President Cyril Ramaphosa’s bid to clean up the government took a knock after a probe found his ex-health minister may have acted unlawfully. The Special Investigating Unit, a law enforcement agency, stopped short of specifying that Zweli Mkhize should be criminally prosecuted but was nonetheless damning about his role in the awarding of a R150 million contract to close associates. “At best, this conduct on the part of the minister as improper and at worst, the conduct of the minister was unlawful,” the unit said. The findings are a blow to Ramaphosa, who took over in 2018 pledging an end to the corruption-tainted tenure of Jacob Zuma

International Market Update

– European stocks closed higher on Wednesday, looking to shrug off market nerves after rising U.S. bond yields led to a sell-off in the previous session. The pan-European Stoxx 600 provisionally closed up 0.7%, after losing as much as 2% Tuesday. Autos added 1.6% to lead gains as most sectors and major bourses swung into positive territory. European investors are closely watching
movements in the U.S. bond market after the benchmark 10-year Treasury yield touched a high of 1.567%, prompting tech shares to lead the broader markets lower.

– The S&P 500 and the Dow Jones Industrial Average rose slightly on Wednesday, but the technology sector struggled again as the 10-year Treasury yield traded volatilely. The 10-year Treasury yield eased on Wednesday morning to trade below 1.5% but bounced back toward 1.54% in afternoon trading. The benchmark yield rose as high as 1.56%. Tech stocks, which were hit hardest during
Tuesday’s market rout, struggled to maintain a rebound on Wednesday.

– Shares in Asia-Pacific traded mixed this morning as investors reacted to the release of Chinese factory activity data for September. China’s official manufacturing Purchasing Managers’ Index for September came in at 49.6, below expectations for a reading of 50.1 by analysts in a Reuters poll.

In International news

<Micron’s weaker-than-expected guidance due to its PC customers' shortages
Micron Technology CEO Sanjay Mehrotra told CNBC on Wednesday the memory chip maker felt confident about its business overall, despite its current-quarter revenue projections coming in below Wall Street estimates. In an interview with Jim Cramer on “Mad Money,” Mehrotra said the lower-than-expected sales guidance is a result of external factors that its computer-making customers are facing. “PC end user demand is strong, but some of the PC customers are not able to fulfil their demand because they’re not getting sufficient all components that are needed to build the PCs,” Mehrotra told Cramer

YouTube to remove all anti-vaccine misinformation
YouTube has said it will remove content that spreads misinformation about all approved vaccines, expanding a ban on false claims about Covid-19 jabs. Videos that say approved vaccines are dangerous and cause autism, cancer or infertility are among those that will be taken down, the company said. The policy includes the termination of accounts of anti-vaccine influencers. Tech giants have been criticised for not doing more to counter false health information on their sites.