The JSE was sharply weaker at noon on Thursday, led by banks after worse-than-expected factory-gate price inflation data pretty much sealed the case for another interest-rate hike in June, traders said.
By 11.54am the JSE’s broader all-share index was down 0,96%, weighed by a 1,99% drop in banks. Financials lost 1,36% and industrials were down 0,06%. Resources gave up 1,41%, while the gold- and platinum-mining indices shed 0,29% and 0,78% respectively.
The rand was bid at 7,75 to the dollar from 7,67 when the JSE closed on Wednesday, while gold was quoted at $901 a troy ounce from $902,70/oz at the JSE’s last close.
“Banks didn’t like the PPI [producer price inflation] numbers, which come after yesterday’s [Wednesday] double-digit consumer inflation numbers,” one trader said, adding that other interest-rate-sensitive stocks such as retailers and financials reacted negatively to the PPI data.
Official data showed that PPI rose by 11,8% year on year (y/y) in March, above the 10,9% the market had expected and above the 11,2% y/y increase in February, prompting economist to consider two more 50 basis point interest-rate hikes this year.
Banking group Standard Bank tumbled 2,37%, or R2,13, to R87,86, FirstRand weakened 2,20%, or 36 cents, to R15,97 and Absa gave up 1,84%, or R1,85, to R98,65.
Retailers were also among the bourse’s worst casualties as interest rates continue to mount pressure on consumers. Specialist retailers NuClicks slumped 4,24%, or 59 cents, to R13,31. It earlier reported a 25,8% rise in diluted headline earnings per share to 67,8 cents for the six months ended February from 53,9 cents previously, but warned that the trading environment would get tougher in the coming year.
Clothing and grocer retailer Woolies was down 2,26%, or 27 cents, to R11,70 and furniture group Lewis was off 1,28%, or 49 cents, at R37,76.
Elsewhere, resource giant BHP Billiton fell 1,66%, or R4,80, to R284 and Anglo American slipped 1,71%, or R9, to R518.
Synthetic fuels maker Sasol dipped 1,29%, or R5,88, to R449,11 on profit-taking and a slightly weaker oil price, traders said.
Among platinum miners, Aquarius Platinum rallied 5,60%, or R6,50, to R122,50. It earlier reported a decline in production to 191 942 PGM ounces for the quarter ended March from 228 193oz in the December quarter. The group said the reduced production reflected challenging operating conditions in the quarter in both South Africa and Zimbabwe.
Anglo Platinum was down R8,20 to R1 296,80 and Impala Platinum shed R2 to R319,50.
Among gold counters, AngloGold Ashanti was down 86 cents to R280,50 and Gold Fields weakened 35 cents to R107,20.
ICT firm Altech was flat at R50,02. It earlier reported a 21% increase in diluted headline earnings per share to 494 cents for the year ended February from 406 cents before. HEPS were up 23% to 511 cents from 414 cents previously. — I-Net Bridge