Weaker world markets and a stronger rand sent the JSE Securities Exchange South Africa (JSE) south on Monday, with gold stocks providing the sole bright spot on the back of a stronger bullion price. With the Heritage Day holiday on Wednesday and no incentive to draw buyers into the market, volumes were fairly light.
At 11.51am, the all-share and all-share industrial indices were 0,63% and 1% weaker respectively. Financials fell 0,48%, while the banks index dipped 0,29%, Resources retreated 0,46%, the platinum mining index plunged 1,33%, but the gold mining index jumped 2,07%.
The rand was trading at R7,27 to the dollar from R7,36 when the JSE closed on Friday, while gold was quoted at $386 an ounce from $381,60/oz at the JSE’s last close.
“The market is as dead as a dodo. The Nikkei was under huge strain — it took umbrage because of the weak dollar — and the rest of world markets have also taken lead from the dollar,” a dealer said.
He continued that in addition to world markets, the strong rand was also having a negative affect on the JSE, particularly the resources market.
“Resources stocks should have been powering ahead because of the gold price, but they have collapsed in a miserable heap,” he lamented.
He asserted that there was no motivation for buyers to go into the market and expected it to remain quiet for the rest of the day.
Shares to fall in morning trade included London-listed diversified resources group Anglo American, which shed R1 to R139.
BHP Billiton tumbled 2,07% or R1,05 to R49,70, while AngloPlat was 2,96% or R7,70 softer at R252,30.
Swiss-listed luxury goods group Richemont was 2,02% or 30 cents in the red at R14,55, London-listed beverages group SABMiller was down 1,24% or 69 cents at R55,10 and pulp and paper producer Sappi slipped 1,09% or R1,10 to R99,90.
Cellular network operator MTN Group fell 1,15% or 20 cents to R17,20.
On the financial index, London-listed Old Mutual lost 1,98% or 23 cents to R11,40 and Remgro was off 30 cents at R58,60.
On the upside, Gold Fields soared 3,7% or R4 to R112 and Harmony was 1,94% or R2,21 higher at R116,20.
AngloGold bucked the firmer trend on the gold mining index and was R2,90 in the red at R294,50.
Retailer Metcash gained 2,48% or five cents to R2,07 and construction group Murray & Roberts was 2,2% or 30 cents stronger at R13,80.
The dealer said that on Tuesday the market would be watching consumer inflation data to be released at 11.30am.
South Africa’s August consumer price index excluding mortgage changes (CPIX), which is used by the South African Reserve Bank for its inflation target, is expected to ease to a median of 6,2% y/y from July’s 6,6% y/y and June’s 6,4% y/y.
The range of forecasts is from 5,6% y/y to 6,4% y/y. Both the median and range are exactly the same as for the July survey, showing that consumer inflation at the CPIX level is stabilising. — I-Net Bridge