The JSE remained on the back foot at midday on Monday as the overall market was weighed by weaker mining stocks. Lower commodities prices — notably gold and platinum — as well as the firmer rand were weighing on miners.
By noon, the all-share index was 1,4% lower, with a 5,16% tumble in gold miners and a 2,79% dip in platinum shares. Resources were off 2,59%.
Industrials were 0,76% lower.
However, banks were up 1,75% and financials added 0,69%.
The rand was bid at 7,19 to the US dollar, from 7,27 when the JSE closed on Friday, while gold was quoted at $909,10 a troy ounce, unchanged from the JSE’s last close. Platinum was last at $1 626/oz, down $20,50/oz from its overnight close.
A local trader said there was rotation from resources and miners into banks and financials.
He said the firm rand was weighing on resources and dual-listed stocks, but manufacturers and industrials were also feeling the brunt of the strong currency. When the rand is firm it makes local shares more expensive for foreign investors.
“We are definitely seeing a bit of sector rotation from resources and into banks and financials, which is the undervalued sector at this stage,” said the trader.
Dow Jones Newswires reports US stock futures are slightly lower ahead of the open as investors await key inflation data for further direction.
In London, the FTSE was last up 5,5 points.
Among gold counters on the JSE, AngloGold Ashanti was off R7,56, or 3,27%, at R223,45 and Harmony lost R3,90, or 5,1%, to R72,50.
Gold Fields was down R5,74, or 7,27%, at R73,26, after a 10,70% fall on Friday. Earlier, the world’s fourth-largest gold producer confirmed that 2 050 mineworkers at its South Deep operation had taken voluntary retrenchment packages.
The company, which on Friday reported its June quarter and full year results, said it needed to reduce its workforce at South Deep by 1 885 people because the Ventersdorp Contact Reef area in which these mineworkers had been working had been depleted.
Platinum miner Anglo Platinum shed R17,01, or 1,87%, to R893 and Impala Platinum lost R7,45, or 3,47%, to R207,50.
On the resource index, Anglo American was down R13,70, or 3,44%, to R384,96 and BHP Billiton gave up R2,29, or 1%, to R226,50.
Sasol lost R7,26, or 1,89%, to R377,
Among industrials, Richemont was off 49 cents to R42,01 and PPC was 90 cents, or 2,77% softer, at R31,60.
SABMiller (SAB) added R2,19, or 1,47%, to R151,50.
Among banks, Standard Bank was up R2,33, or 2,7%, to R88,55 and Nedbank added R1,01, or 1%, to R102,01. – I-Net Bridge