The JSE Securities Exchange South Africa (JSE) was unable to hold on to early gains on Tuesday, instead heading south on the back of weaker European markets and profit taking after four straight days of gains. Weakness was most pronounced at the top end of the market, with decliners outnumbering advancers by three to one on the Top 40 index, compared to about four to three on the all-share index.
By 11.55am, the all-share and all-share industrial indices were down 0,61% and 0,65% respectively. Financials fell 1,2%, with the banks index losing 1,34%.
Resources eased 0,27%, the platinum mining index plunged 2,17%, but the gold mining index bounced 2,76%.
The rand was trading at R7,02 to the dollar from R7 when the JSE closed on Monday, while gold was quoted at $373,25 an ounce from $370,55/oz at the JSE’s last close.
“It has gone a little quiet. There was a lot of action earlier this morning,” a dealer said.
He continued that the JSE appeared to be following European markets, which had turned negative. There also appeared to be profit-taking in banking stocks, which were pushed up hard on Monday, and the likes.
“With the MPC decision on Thursday, people are saying a 100 basis-point rate cut would be slightly positive for the rand — people are pricing in 150 basis points at the moment. A stronger rand would take the market weaker,” the dealer added.
The South Africa Reserve Bank’s monetary policy committee is expected to announce a further cut in the repo rate on Thursday afternoon after its two-day meeting. While the market has been pricing in a 100 basis-point rate cut, many economists are more cautious, saying the committee will only cut the repo rate by 100 basis points.
Favourable interest rate differentials and the related carry trade are widely regarded as a reason for the rand’s strength in recent months.
Shares to decline in morning trade included London-listed diversified resources group Anglo American, which was down 1,09% or R1,55 at R140,60.
BHP Billiton was 34 cents softer at R54,76.
Impala Platinum tumbled 2,36% or R13,90 to R576 and AngloPlat was off 1,79% or R5,03 to R276.
On the industrial market, Swiss-listed luxury goods group Richemont retreated 1,35% or 20 cents to R14,65.
Amalgamated Beverage Industries, which on Monday traded at an all-time best level, slipped 2,65% or R1,75 to R64,25.
Telecommunications group Telkom lost 2,26% or R1,10 to R47,50. Cellular network operator MTN Group was down 2,57% or 59 cents to R22,41.
On the financial front, London-listed Old Mutual was 1,42% or 17 cents weaker at R11,78 and Sanlam shed 1,06% or nine cents to R8,40.
Standard Bank was down 1,41% or 50 cents at R34,90, FirstRand fell 1,08% or nine cents to R8,21, Nedcor weakened 1,58% or R1,20 to R74,80 and Absa was 1,77% or 69 cents in the red at R38,40.
Niche banking group Investec Plc lost 2,06% or R2,20 to R104,80 and Investec Ltd lost 3,91% or R4,20 to R103,30.
On the upside, gold stocks dominated, with Gold Fields soaring 3,21% or R2,99 to R96,11 and Harmony jumping 3,16% or R2,97 to R97.
AngloGold added 2,14% or R5,51 to R263,51.
Mid-cap gold miner Durban Roodepoort Deep rocketed 5,26% or 96 cents to R19,21.
Steel producer Iscor was 2,38% or 50 cents stronger at R21,50. — I-Net Bridge