A stronger rand and weaker world markets pulled the rug up from under heavyweight dual-listed and resources stocks on the JSE Securities Exchange South Africa (JSE) on Wednesday, leaving the overall index almost 1% lower just after midday.
Only three shares on the Top 40 index posted gains, while on the all share index, decliners outnumbered advancers by more than two to one.
At 1238, the all share and all share industrial indices were 0,94% and 0,53% weaker respectively. Resources retreated 1,10%, while the gold mining index gave up 1,12%. Financials fell 1,17%, while the banks index was down 1,01%. The platinum mining index was flattish (+0,11%).
The rand was trading at 7,37 to the dollar from 7,44 when the JSE closed on Tuesday, while gold was quoted at $352,50 an ounce from $350,15/oz at the JSE’s last close.
“The JSE is down because of the stronger rand. Even though the gold price is up, some of the gold stocks are taking a pounding,” a dealer said.
He continued that the Dow fell heavily on Tuesday and Asian and European markets had followed suit on Wednesday — a situation which was not helping the JSE.
“The market is very quiet. There is quite a lot of volume in Anglo ahead of their results on Friday. Otherwise, there is very little activity,” the dealer commented.
London-listed diversified resources group Anglo American led the downside of the market and was 1,40% or 1,85 cents weaker at R130.
BHP Billiton was down 1,58% or 71 cents at R44,34.
On the gold mining index, Gold Fields gave up 1,15% or one rand to R86 and AngloGold was off 1,45% or R3,50 at R237,50. Harmony lost 50 cents to trade at R91.
The dealer noted that Impala Platinum, which was up R2,50 to trade at R488, had bucked the weaker trend because there was an order in the market for the share, which was pushed up by lack of liquidity.
On the all share industrial index, Swiss-listed luxury goods group Richemont retreated eight cents to R13,50 and London-listed beverages group SABMiller was 40 cents softer at R51,60.
Pulp and paper producer Sappi shed 90 cents to R92,60.
London-listed financial services group Old Mutual lost 1,31% or 15 cents to trade at R11,26 and Sanlam (SLM) slumped 2,12% or 16 cents to R7,40.
Liberty group was under pressure, plummeting 3,92% or two rand to R49 after reporting disappointing results before the opening.
The life insurer reported a 46% decline in basic headline earnings per share for the six months ended June 30 to 130 cents from 242,5 cents a year ago.
“Liberty’s earnings were well below consensus. We were expecting a 19% decline and there was a 46% decline,” the dealer commented.
He added that on the positive side, embedded value — at R53,42 — was in line with expectations and the group had positive cash flow.
Also, Liberty’s earnings had been hurt by weak world markets and were expected to pick up along with these.
Liberty’s associate Standard Bank was the worst performer of the big banks, slipping 1,48% or 50 cents to R33,20. – I-Net Bridge