The JSE was in negative territory in noon trade on Tuesday with a recovery in the rand sparking profit taking in stocks that benefited from the currency’s weakness in recent days. Banks, which were hit hard by concerns about the interest rate implications of the rand’s weakness, led the market’s upside.
By 12.07pm, the all share index shed 0,53%. Resources retreated 1,42%, the gold mining index lost 1,72% and the platinum mining index surrendered 2,46%.
Industrials were flattish (-0,03%). Financials firmed 0,56%, however, while the
banks index was 1,55% in the black.
The rand was bid at 7,24 per dollar from 7,38 when the JSE closed on Monday, while gold was quoted at $587,40 a troy ounce from $577,85/oz at the JSE’s last close.
“The market is rand driven. That’s the main sentiment of the day and we’ve seen profit-taking coming in on the back of it,” a dealer said.
He added that resources stocks, which were the main beneficiaries of recent rand weakness, were hardest hit.
People also didn’t want to second guess what the market would do in reaction to the United States Federal Open Market (FOMC) announcement on US rates due on Thursday evening and were squaring positions ahead of that, the dealer commented. While a 25-50 basis point rate hike had been discounted, anything else was likely to elicit market reaction.
There was a bit of a switch out of resources and into banks, which were sold down quite sharply recently due to concerns that rand weakness, which has inflationary implications, would lead to rate hikes locally, he concluded.
On the resources index, London-listed Anglo American tumbled 2,08% or R6 to R282,50 and BHP Billiton lost 91 cents to R132,60.
Gold Fields fell 2,62% or R4 to R148,50, Harmony slid 2,66% or R2,90 to R106,10, while DRDGOLD dropped 4,18% or 41 cents to R9,39.
AngloPlat plunged 4,76% or R35 to R700. Petrochemicals group Sasol was R1 softer at R262,50.
Industrials to decline included Swiss-listed luxury goods group Richemont which retreated 1,91% or 60 cents to R30,85.
Pulp and paper producer Sappi shed 1,02% or 90 cents to R87,60.
Retailer JD Group gave up 2,43% or R1,57 to R62,93.
Edcon plunged 4,41% or R1,20 to R26 after trading at a one-year low of R25,95.
New Clicks slumped 4,39% or 36 cents to R7,84.
Massmart, which traded at a one-year low of R41,85, was 30 cents in the red at R42,20.
Furniture group Steinhoff, however, strengthened 2,23% or 43 cents to R19,74.
Telkom jumped 2,24% or R2,80 to R127,80.
Transport and logistics group Imperial rallied 4,08% or R5 to R127,50, services group Bidvest leaped 3,55% or R3,29 to R96 and brand management group Barloworld was 1,61% or R1,79 better at R112,79.
Food group Tiger Brands roared ahead 3,63% or R4,90 to R140.
Media group Naspers notched up 2,23% or R2,50 to R114,50. Before the opening, it reported a 63% increase in its core headline earnings per ordinary N share to 696 cents for the year ended March 2006 from 427 cents for the 12 months to March 2005. Naspers’ board proposed that the annual dividend be increased by 71% to 120 cents per N ordinary share from 70 cents previously.
On the financial front, London-listed Old Mutual fell 1,08% or 23 cents to R21.
Health and life insurer Discovery was 2,06% or 40 cents weaker at R19,05 after earlier traded at a one-year worst level of R18,25.
Sanlam strengthened 2,03% or 28 cents to R14,08 and Liberty Group gained 1,94% or R1,30 to R68,30.
Banking group FirstRand firmed 1,3% or 20 cents to R15,60, Nedbank bounced 2,46% or R2,50 to R104 and Absa added 2,03% or R1,85 to R92,85. Standard Bank was 65 cents in the black at R69,55. – I-Net Bridge