Publications
Partners
Johannesburg - The JSE followed other emerging markets lower on Friday, on concerns that incoming US president Donald Trump’s policies may lead to interest rate hikes in the US.
Bond yields in the US rose sharply on fears that Trump’s plans to promote growth in the US by increased spending and higher import tariffs will lead to higher inflation, which may force the Federal Reserve to raise interest rates.
Higher interest rates in the US may lead to an outflow of capital from emerging markets back to the US, where risks are perceived to be much lower.
The rand also lost ground in line with other emerging currencies, and at mid-morning was more than 6% lower at R14.31 to the dollar.
A weaker rand is normally good news for the dual-listed shares on the JSE, which represent more than 50% of the market’s value, but it did not play a part this morning.
The result was that the All-share index at midday was already 1.86% lower at 50 536 points, and the Top 40 index traded 1.87% weaker at 44 182 points.
The biggest loser was the Industrial index which shed 2.05%, and the Financial index which lost 1.87%. The Resources index, which gained almost 4% on Thursday with some shares more than 10% higher, lost momentum and traded 1.57% softer. The Gold index was 3.97% lower.
Naspers [JSE:NPN], which represents almost 12% of the JSE’s market value, led the market lower as it lost 4.12% to trade at R2 123.10 at midday. The drop in the Naspers share price was in reaction to a 3.82% fall in Chinese internet giant Tencent in Hong Kong. Naspers owns more than 34% of Tencent, the biggest company in China.
Other big losers were Steinhoff [JSE:SHF] which lost 3.19% to R71.63, and MTN [JSE:MTN] which traded 2.71% softer at R113.71. Sasol [JSE:SOL] was 1.54% lower at R371.46.
British American Tobacco [JSE:BTI], which lost more than 20% over the previous 90 days, made a sharp turnaround and gained 3.97% to R776.92. Richemont [JSE:CFR] was also 1.75% higher on R96.30.
Glencore [JSE:GLN], which rose more than 11% on Thursday, strengthened further on Friday and added 2.51% to R51.10. Glencore seems to be catching up with other resources shares, which started to recover much earlier, and before Friday's trade the global commodity gained a massive 23.15% over the previous seven days. It is now 149.87% higher for the year to date.
The two iron producers Kumba [JSE:KIO] and Assore [JSE:ASN], which both traded more than 10% higher on Friday, lost ground again. Kumba, which before Friday’s trade was a massive 355.12% higher for the year to date, was 5.22% softer at R161.08; Assore lost 5.72% to R215.00, but is still 267.8% higher for the year to date.
FirstRand [JSE:FSR] was 3.52% lower in the financial sector at only R48.00.
