The JSE Securities Exchange South Africa (JSE), which bounced into the black at the opening after a sharp sell-off on Monday, was soon back in the red on Tuesday dragged down by basket-selling by futures players. However, dealers said that definite bargain-hunting was being seen at stocks’ lower levels and that the bourse would likely firm again should the futures baskets cease coming through.
By 11.50am, the all-share and all-share industrial indices were both down 0,41%, while the financial and banks indices fell 0,49% and 0,33% respectively. Resources retreated 0,38%, the gold mining index lost 0,81%, but the platinum mining index soared 3,02%.
The rand was quoted at R6,95 per dollar from R7,00 when the JSE closed on Monday, gold was quoted at $377,90 an ounce from $376,50/oz at the JSE’s last close, while platinum was quoted at $785,50/oz from $769,50/oz when the JSE closed previously.
“The JSE is down, not on anything else but basket-selling,” a dealer said, adding that reverse arbitrage activity was being seen, with players buying futures and selling shares.
He explained that when the selling stopped, the market bounced and when the selling resumed the market fell again.
“Most of the volume is coming through on the derivatives side,” he noted.
The dealer said that a couple of stocks were still positive and even the ones that were down were attracting buyers at the lower levels. He would therefore not be surprised if the market crept up if the reverse arbitrage trades stopped coming through.
“The gold price is marginally better and a ‘head and shoulders’ has formed on South African gold shares, which suggests they are attractive in the medium-term,” he commented.
“The rand is having a bit of a negative effect on the market, but not much. It is really taking a sideline at the moment.”
In morning trade, London-listed diversified resources group Anglo American eased 90 cents to R134,70, while synthetic fuels group Sasol slid 2,08% or R2,07 to R97,38.
Gold miner AngloGold added R2,10 to R221,20, but Harmony plunged 2,65% or R1,94 to R71,20 and Gold Fields tumbled 2,32% or R1,64 to R69,15. Harmony hit a one-year low of R70,75 on Tuesday morning, while Gold Fields touched its lowest level since January 2002 when it traded at R68,11.
Impala Platinum leaped 3,53% or R15 to R440 and AngloPlat soared 3,64% or eight rand to R228.
On the industrial market, Swiss-listed luxury goods group Richemont slipped 1,2% or 20 cents to R16,51.
Telecommunications group Telkom slumped 2,45% or R1,90 to R75,50 and London-listed beverages group SABMiller weakened 50 cents to R72,90.
Steel producer Iscor was 2,5% or 80 cents softer at R31,20.
On the upside, cellular network operator MTN Group bounced 4,86% or R1,25 to R26,95 after falling more than 8% on Monday.
Pulp and paper producer Sappi strengthened 2,14% or R1,95 to R93.
Shares to fall on the financial front included holding company Remgro, which was 1,37% or R1,01 in the red at R72,50.
Real estate company Liberty International plc was 1,68% or R1,50 lower at R88.
Financial services group Sanlam slipped 1,71% or 15 cents to R8,60.
Banking group FirstRand was down seven cents at R9,20 and Nedcor dipped 20 cents to R59,81.
Absa, however, added 10 cents to R43,95.
Niche banking group Investec plc, which lost almost 10% on Monday, rebounded 4,05% or R4,50 to trade at R115,50. — I-Net Bridge