Johannesburg - The rand traded firmer off dollar weakness on Thursday, which put a damper on most of the JSE's activities.
The local currency strengthened almost 2% to R13.39 to the dollar, which was bad news for the big dual-listed rand hedge shares on the JSE.
By mid-morning the Industrial index, which set a new record earlier in the week, was 0.26% lower, while the Resources index was 0.50% down. The Financial index dropped 0.72% with FirstRand [JSE:FSR] losing 0.97% to R49.07 and Nedbank [JSE:NED] 1.7% to R218.06.
The result was that the major indices also traded marginally lower, with the All-share index losing 0.41% to 54 035 points and the Top 40 index 0.42% softer at 47 435 points.
The stronger rand is the result of a lower dollar following the abrupt firing of FBI director James Comey by US President Donald Trump. These actions are causing such a political storm in Washington that investors fear it will make Trump’s promised tax and healthcare reform more difficult
The big news in the industrial sector was the news that EU antitrust regulators raided a number of kraft paper and industrial paper sack makers - including South Africa’s Mondi - on Tuesday, on suspicion that the companies may have been involved in a cartel.
The dual listed Mondi plc [JSE:MNP] and Mondi Ltd [JSE:MND] both dropped sharply, after both had been trading at new 52-week highs for some time. Mondi plc lost 3.66% to R340.08 and Mondi Ltd was 3.88% softer at R339.53.
The mood was further soured by Mondi’s announcement that underlying operating profit for the first quarter of 2017 was 6% lower than a year ago, due to lower selling prices and inflationary cost pressures.
Sappi [JSE:SAP], the other paper group on the JSE which has also been trading at high levels lately, dropped 2.28% to R101.14.
Naspers [JSE:NPN], the biggest share on the JSE, defied the stronger rand and traded 0.48% to reach yet another all-time high of R2 693.58. Richemont [JSE:CFR] was however 0.35% lower at R113.67 and British American Tobacco [JSE:BTI] lost 0.32% to R920.50.
Sasol [JSE:SOL] was the big disappointment of the day as it did not respond to a welcome spike in the oil price. Oil prices extended their 3% plus overnight gains, their biggest one-day jump since December 1, following a steep drop in US inventories and a bigger-than-expected cut in Saudi supplies to Asia.
Global benchmark Brent crude advanced 0.5% to $50.46, but Sasol’s share price lost 0.47% to R408.22. Sasol’s income is directly dependent on the oil price.
BHP Billiton [JSE:BIL], another company with interests in the oil industry, was however 0.53% higher at R204.10 while Anglo American [JSE:AGL] gained 0.48% to R183.56.
Retail shares continued to be among the busiest shares on the market. Shoprite [JSE:SHP] gained 1.18% to R198.31, but Woolworths [JSE:WHL] lost 2.21% to R70.89.