The JSE surrendered early gains to head south on Thursday as players adopted a cautious stance ahead of the Monetary Policy Committee’s (MPC) announcement on interest rates due just after 3pm. Weakness on offshore markets and a lower gold price added to the negativity.
By 11.59am, the all-share index slipped 0,42%. Industrials lost 0,9, while the financial and banks indices fell 0,58% and 0,84% respectively. Resources were flat (+0,02%), while the gold-mining index eased 0,12% and the platinum-mining index lost 1,43%.
The rand was bid at 6,90 per dollar from 6,85 when the JSE closed on Wednesday while gold was quoted at $646,45 a troy ounce from $655,22/oz at the JSE’s last close.
“I think the market has started to look more cautiously at the rates decision today [Thursday]. We also had a couple of negative results before the opening — Gold Fields is one and Sappi the other,” a dealer said.
He continued that the market is not doing much in terms of volumes. “Futures markets offshore are all negative and there might be a bit of caution coming in to our market and a bit of profit-taking after a reasonably strong rise,” he said. “It could get messy this afternoon if there is a surprise from the MPC.”
While the majority of economists expect a 50-basis point rate increase, there has been market talk that the MPC will go for a 100-basis point hike.
In morning trade, London-listed Anglo American added R1,51 to R291,50 and BHP Billiton was 49c better at R130,82.
Gold miner Gold Fields gained R1,30 to R154,35, although the dealer insisted that this was only because it had a very strong close in the United States.
“In the US Gold Fields was trading way higher in the region of R158,” he noted. “When the US comes in later, I think we will see more pressure coming into gold names.”
He expected the lower gold price, Gold Fields’ disappointing results and the fact there was a significant push into gold stocks in the US overnight to all contribute to this.
Gold Fields on Thursday reported net attributable earnings of R604-million for the quarter ended June after net earnings of R483-million in the March quarter and negative R27-million for the June quarter a year ago.
Headline earnings per share rose to 120c in the June quarter from 90c in the previous quarter.
For the year ended June, earnings increased eleven-fold from R128-million to R1,389-billion — or $217-million. Headline earnings per share rose to 270c from 49c in the previous year.
A final dividend of 110 South African cents per share was declared, giving a total dividend of 150c for the year.
According to an I-Net Bridge consensus forecast, Gold Fields was expecting to report headline earnings per share of 286c for the year to June, while its total dividend was seen coming in at 147c.
AngloGold Ashanti shed R1,98 to R346,02 and Harmony lost 74c to R98,11.
Pulp and paper producer Sappi plunged 3,52% or R3,50 to R95,80 after it reported a headline loss per share of US20c for the quarter ended June after headline earnings per share of 5c in the March quarter and a headline loss per share of 5c in the June quarter in 2005. The June quarter net loss per share was US23c.
Mittal Steel was 3,47% or R2,50 softer at R69,50.
Sugar and aluminium group Tongaat-Hulett dropped 4,09% or R4,01 to R94.
London-listed brewer SABMiller slipped 1,66% or R2,25 to R133,50 and Swiss-listed luxury goods group Richemont retreated 24c to R30,39.
Media group Naspers tumbled 2% or R2,35 to R115,15 and cellular network operator MTN Group surrendered 1,29% or 67c to R51,28.
Retailers were under pressure, with Edcon sliding 2,1% or 55c to R25,65 and Lewis dropping 2,34% or R1,50 to R46,91.
Media group Johncom, however, jumped 4,76% or R2,99 to R65,79.
Among financials, Standard Bank inched up 11c to R73,90 and microlender ABIL bounced 1,79% or 40c to R22,70.
FirstRand fell 2,06% or 34c to R16,15 and Absa surrendered 1,71% or R1,71 to R98,50.
Sanlam eased 13c to R15 and Liberty Group gave up 1,53% or R1,11 to R71,39, while London-listed Old Mutual was 1,09% or 23c lower at R20,81. — I-Net Bridge