JSE closes flat after golds give up gains

Cape Town - The JSE All Share index ended the day relatively flat as gold stocks shed earlier gains to close the day lower.

The JSE All Share index ended the day 0.09% higher, the Top 40 was up 0.01%, and surprisingly enough, Financials were down 0.17% despite the firmer rand. The overall Resources index closed up 0.74%, mainly due to platinum miners. Industrials closed the day down 0.18%.

The USD/ZAR traded firmer on the day reaching intra-day highs of R13.15. This was mainly on the back of the weaker dollar, which saw the US Dollar index reaching lows of 98.78 before a very minor retracement to trade at 98.89 at JSE close.

Gold miners reversed earlier gains going into the close which saw the Gold index closing 1.06% lower. DRD Gold [JSE:DRD] closed 2.74% lower, Anglogold Ashanti [JSE:ANG] was down 1.50% and Sibanye Gold [JSE:SGL] 1.50% lower.

The big story locally, was the announcement by Aspen Pharmacare [JSE: APN] confirming proceedings by the European Commission to investigate certain actions by the firm and some of its European subsidiaries. As a result the stock traded lower during the day and eventually closed down 3.60%.

READ: Aspen faces EU probe over excessive pricing of cancer drugs

Netcare also traded significantly lower after the release of a fairly poor set of results which indicated a decrease in both group revenue and adjusted headline earnings per share. The stock was down 1.81% at close.

On the gainers, Bidvest [JSE:BVT] closed up 2.46%, while Vodacom [JSE:VOD] and Sappi [JSE:SAP] closed up 0.24% and 0.74% respectively, on the back of descent earnings results released on Monday.

Gold benefited from the weaker dollar, managing to reach intra-day highs of $1 237.40/oz, before trading at $1 234.20 a fine ounce at the JSE close.

Brent Crude also jumped as information emerged that Saudi Arabia and Russia are in favour of a long-term production cut deal that could extend into 2018. Brent Crude reached an intra-day high of $52.63 a barrel before retracing slightly to trade at $52.17 when the JSE closed.

Platinum was also up just over $13 on the day, and was trading at $935.73 at JSE close. Given the consecutive weeks of pressure on commodity prices, the minor relief should work well for commodity producers.

Meanwhile on the data front, China's industrial production came in at 6.5%, which missed estimates of 7.0%. Retail sales data from the same country also missed estimates slightly, coming in at 10.7% on the back of a 10.8% forecast. Decreasing industrial production from China, the world’s biggest commodity consumer, is a worrying signal for commodity producers globally. This could put pressure on commodity prices if the slump is protracted.

From the US, the main significant set of data was the Empire State Manufacturing Index which was recorded at -1.0, against an estimate of 7.5.

*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.