Stock punters bet the UK will vote ‘Bremain’

MOST stock exchanges trading ahead of the JSE’s opening on Thursday morning were optimistic the British will vote to remain in the EU.

Tokyo’s Topix and its Nikkei 225 indices were both about 0.8% higher. Hong Kong’s Hang Seng index was slightly higher, but mainland China’s Shanghai Composite Index was down 0.83%.

Optimism that the UK will remain in the EU helped the pound strengthen to £0.68 per dollar, which in turn helped the rand strengthen to about R14.58 per dollar.

Wednesday’s surprise slowdown in inflation, which reduced the chances of another interest rate increase on July 21, saw clothing retailers Mr Price gain 4.36% to R210.22 and Truworths 3.17% to R94.06.

Reduced chances of further interest rate increases was also seen as favourable for banks, with Barclays Africa Group gaining 4.19% to R151.48 and FirstRand 3.19% to R46.20.

The rally of consumer and banking stocks helped the JSE’s all share index gain 1.14%.

Higher oil prices may help the JSE’s resources stocks on Thursday. Brent crude oil contracts for delivery in August cracked the $50/barrel level in Singapore on Thursday morning while West Texas Intermediate oil prices traded for just under $50/barrel in New York on Wednesday.

Higher oil prices lifted BHP Billiton 1.15% to A$18.92 in Sydney ahead of the JSE’s opening. BHP closed 1.65% higher at R185.04 on the JSE on Wednesday.

No statistical releases or company results are scheduled for release on Thursday, keeping all eyes focused on the UK’s referendum.



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