The JSE was deep in negative territory at noon on Thursday as weakness on world markets, lower commodity prices and interest-rate fears continued to weigh. Basket selling by futures players amplified the bourse’s losses.
By 11.59am the all-share and all-share industrial indices slid 3,22% and 3,42% respectively. Resources retreated 2,57%, the gold-mining index surrendered 3,83% and the platinum-mining index plunged 4,65%. Financials fell 3,94%, while the banks index was 4,41% in the red.
The rand was bid at 6,80 per dollar from 6,73 when the JSE closed on Wednesday, while gold was quoted at $618,85 a troy ounce from $620,63/oz at the JSE’s last close.
“The picture is pretty bleak,” a dealer said, adding that the reasons for the JSE’s weakness remained the same as the past few days.
“Concerns that United States rate increases will lead to lower growth globally are hurting equity markets and commodity prices, so we are being hit by a double whammy. Our resources stocks are being hit particularly hard in London.
“Add to that worries that the MPC [South African Reserve Bank Monetary Policy Committee] will hike rates here this afternoon,” he said.
He added that faced with margin calls, derivatives players were closing positions, resulting in selling spreading throughout the Top 40.
The MPC decision is expected just after 3pm. The majority of economists expect it to leave the repo rate unchanged at 7%, but the chance of a rate hike is seen as significantly higher than it was at the MPC’s previous meeting in April.
On the resources index, London-listed Anglo American lost 1,92% or R4,72 to R240,50. BHP Billiton tumbled 2,26% or R2,79 to R120,78.
Impala Platinum dived 6,38% or R69,50 to R1 020,50 and AngloPlat weakened 1,75% or R10 to R561.
AngloGold Ashanti slumped 4,34% or R12,49 to R275,52, Gold Fields gave up 3,48% or R4,42 to R122,75 and Harmony lost 3,72% or R3,40 to R88,10. Junior miner Western Areas sank 8,54% or R3,38 to R36,22.
Petrochemicals group Sasol was 1,56% or R3,71 softer at R234,49.
Swiss-listed luxury goods group Richemont plummeted 5,17% or R1,65 to R30,25.
Before the opening, Richemont reported a net profit of €1,094-billion for the year ended March 31, down 10% from the previous €1,212-billion.
The company said the significant improvement in trading results for the year had been offset by the non-recurrence of the significant gains reported in connection with the investment in British American Tobacco in the comparative period.
Excluding these significant one-off impacts, however, the group’s bottom-line result would have shown an increase of 36% to €1,130-billion for the year, it said.
The proposed dividend for the year was €0,60 per unit — an increase of 20% compared with last year. Richemont also proposed a special dividend of €0,50 per unit, bringing the total payment for the year to €1,10.
Mittal Steel was 3,8% or R2,45 softer at R62,05, while pulp and paper producer Sappi sagged 4,78% or R3,80 to R75,75.
Brand management group Barloworld weakened 3,64% or R4,09 to R108,41.
Tongaat-Hulett slid 4,68% or R4 to R81,50.
Hospital group Netcare dropped 5,69% or 50c to R8,28.
Cellular network operator MTN Group retreated 4,24% or R2,25 to R50,85, while Telkom was off 3,79% or R5 at R127.
Retailer JD Group was 4,84% or R3,51 weaker at R68,99, while Edcon was down 4,39% or R1,40 at R30,50.
Bucking the trend, construction group Murray & Roberts bounced 1,64% or 35c to R21,65 after diving over 12% on Wednesday.
Among financials, life insurer Sanlam plummeted 5,1% or 75c to R13,95. Liberty Group was 3,95% or R2,95 lower at R71,80 and London-listed Old Mutual lost 3,42% or 69c to R19,48.
Standard Bank slid 4,5% or R3,41 to R72,29, FirstRand fell 4,94% or 85c to R16,35, Nedbank surrendered 3,8% or R4,45 to R112,55, while Absa weakened 2,82% or R2,91 to R100,39. — I-Net Bridge