Weaker gold stocks continued to weigh on the JSE Securities Exchange South Africa (JSE) in late-morning trade on Friday, countering the positive affect of a softer rand on the broader market. Volumes were very light, with just more than R500-million-worth of shares changing hands.
At 11.50am, the all-share index was flat (-0,05%), as was the all-share industrial index (+0,07%). Financials and banks were 0,43% and 0,64% firmer respectively. While the resources index was down 0,37%, with the gold mining index plunging 2,25%, the platinum mining index was 0,89% stronger.
The rand was trading at R7,18 to the dollar from R7,11 when the JSE closed on Thursday, while gold was quoted at $384,30 an ounce from $390,30/oz at the JSE’s last close.
Dealers said that Friday’s activity was mainly a rand play.
“Gold stocks are off quite sharply, but the rand is pushing us higher,” one said, adding that the JSE was bucking the weaker trend on world markets.
A second dealer explained that the United States’s perceived weak dollar policy was starting to weigh on foreign markets.
“We are starting to get cracks in some of the European markets,” he commented.
On the JSE’s downside on Friday, AngloGold was 2,79% or R7,99 weaker at R278, Gold Fields gave up 1,78% or R1,91 to R105,60 and Harmony was 1,87% or R2,06 weaker at R107,99.
“We had to get some profit taking in gold. Hopefully, the gold price will start consolidating at these levels,” the second dealer said.
Gold broke above $390 on Thursday for the first time since mid-1996.
Other shares to decline on Friday morning included London-listed diversified resources group Anglo American, which dipped 99 cents to R132, Swiss-listed luxury goods group Richemont, which retreated 11 cents to R14 and banking group FirstRand, which was down four cents at R7,55.
On the JSE’s upside, Impala Platinum jumped 1,59% or R9 to R576.
Synthetic fuels group Sasol surged 1,1% or 92 cents to R84,52 and London-listed beverages group SABMiller was 45 cents stronger at R54,35.
Pulp and paper producer Sappi climbed 80 cents to R96,50.
Cellular network operator MTN Group was up 2,63% or 45 cents at R17,55.
On the financial front, London-listed Old Mutual improved 10 cents to R11,10 and Standard Bank strengthened 1,09% or 35 cents to R32,40. Absa advanced 1,76% or 60 cents to R34,60.
“At the moment, the bulls will play the rand. If you take away the currency I don’t think there is any compelling reason to go into the market,” the dealer said.
He noted that resources were dominating activity on the JSE.
“If you take away resources and the rand, the market is dead. Industrials and financials are not going to sway the direction of the market.” — I-Net Bridge