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JSE heads back into doldrums as rally ends

Johannesburg - Thursday afternoon's strong recovery on the JSE did not last long, and share prices were again drifting lower on Friday in line with the pattern set earlier in the week.

All the major indices, except the Gold index, were lower by mid-morning although losses were modest. The indices were initially volatile, but by mid-morning the graphs were all heading downwards.

The JSE has been in the doldrums all week as markets are nervous due to the political stand-off with North Korea and disappointing results from some of the high-flying companies on the JSE.

Investors were taking profits until Thursday afternoon, when the market suddenly turned around as some investors used the losses of earlier the week as buying opportunities.

However, by mid-morning on Friday the All-share index traded 0.16% lower at 55 792 points, while the Top 40 index was 0.15% softer at 49 335 points. The Industrial index slipped only 0.11%, as heavyweights like Richemont [JSE:CFR] made solid gains. The Financial index was 0.16% down, as the market was disappointed in FirstRand's [JSE:FSR] earnings growth of 7%. Sanlam [JSE:SLM] announced a 19% drop in half-year profit.

The Resources index was 0.14% softer, but the Gold index gained 1.33% as the gold price strengthened further to trade at a new 52-week high of $1 353.03 per ounce.

It was also announced on Thursday that industrial output fell for a third consecutive month, dropping by 1.4% year-on-year (y/y) in July, way below the consensus forecast of a 0.35% contraction. Mining output rose 0.9% y/y, lagging the consensus of a 2.8% increase.

FirstRand was 0.49% softer at R54.32 and Standard Bank [JSE:SBK] lost 0.37% to R165.14. Nedbank [JSE:NED] was unchanged at R204.9 and Barclays Africa [JSE:BGA] traded higher for the second day after shedding almost 7% on Wednesday. The share gained 0.11% to R142.34.

Capitec [JSE:CPI], whose disappointing earnings growth triggered the sell-off in financial shares on Wednesday, was 0.11% stronger at R892.06. Capitec passed Nedbank as South Africa’s fourth-largest lender by value after it gained 2% in Thursday’s recovery, to give it a market capitalisation of R103bn compared to Nedbank’s R102.1bn. Capitec gained more than 28% this year so far while Nedbank pulled back 14%.

Sanlam, which lost 1.2% on Thursday after its 19% earnings drop, traded 1.1% weaker at R66.96.

Richemont was the star in the industrial index when it gained 1.12% to reach a new 52-week high of R119.3. The share is now almost 8% higher over the past 30 days. Naspers [JSE:NPN] lost 0.73% to R2 866.81, while Steinhoff [JSE:SHF] was 0.80% higher at R64.80.

The packaging maker Mpact [JSE:MPT] reported a slump in half-year earnings on Tuesday and halved its interim dividend, but the share price gained 0.04% in brisk trade to R25.60. It was more than 4% lower in early trade. The company said its investments should help boost profit from next year.

Mpact’s headline earnings per share in the six months to the end of June fell 64% to 33.9 cents from 94.9c, while underlying operating profit dropped to R169m ($12.8m) from R322m.

Vodacom [JSE:VOD], which lost more than 8% over the previous two days, was 0.08% higher at R165.83. Trading in the share was still very brisk. MTN [JSE:MTN] was also one of the busiest shares, but lost 1.26% to R122.19.

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Rand - Dollar
19.02
-0.6%
Rand - Pound
24.00
-0.4%
Rand - Euro
20.52
-0.3%
Rand - Aus dollar
12.35
+0.0%
Rand - Yen
0.13
-0.6%
Platinum
900.40
+0.4%
Palladium
998.40
-0.3%
Gold
2,212.97
+0.8%
Silver
24.70
+0.2%
Brent Crude
86.09
-0.2%
Top 40
68,068
+0.6%
All Share
74,264
+0.5%
Resource 10
56,909
+2.2%
Industrial 25
103,553
+0.3%
Financial 15
16,463
-0.4%
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