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Johannesburg - The relief rally on global markets, which pushed all the major indices on Wall Street to new records on Tuesday, showed signs of faltering on Wednesday morning and the JSE followed suit.
Most of the JSE's major indices hardly moved on Wednesday, despite a weaker rand which dropped to R13.04 on Tuesday afternoon against a resurgent dollar. Investors took some profits after a strong rally on Tuesday on the back of the weaker rand.
The All-share index on the JSE was only 0.25% lower at 56 224 points, and the Top 40 index traded 0.30% softer at 49 823 points. The Industrial index was 0.25% lower, the Financial index lost 0.10% and the Resources index gave up 0.43% as mining shares also dropped back in Europe.
Investors are also waiting for new indicators about the state of the economy. Attention is now on the South African Reserve Bank’s monetary policy committee meeting next week. According to a Reuters survey, 17 out of 26 participating economists said the Reserve Bank will cut its repo rate by 25 basis points to 6.5%.
The global rally lost some momentum in Europe on Monday as investors were disappointed by a later-than-expected shipping date for the newly released iPhone. Apple suppliers were the hardest hit and pulled the major indices slightly lower.
European shares rose to a five-week high on Tuesday, extending the relief bounce seen in the previous session as worries about Hurricane Irma and North Korea’s nuclear standoff eased.
Asian markets were also slightly lower after trading at their highest level since 2007, and Tencent was 1% up on yet another record of HK$334.00.
Naspers [JSE:NPN], whose value is mostly determined by what is happening with Tencent, was 0.14% softer at mid-morning at R2 980.95, after reaching R2 997.97 in earlier trade.
Some of the big industrial shares which rallied on Tuesday afternoon on the back of a stronger rand dipped slightly. Richemont [JSE:CFR], which closed on a 52-week high of R120.30 on Tuesday, was 0.75% softer at R119.40. British American Tobacco [JSE:BTI] was 0.25% down at R828.70 and Mondi [JSE:MNP] lost 0.15% to R359.07 after it also closed on a 52-week high of R359.60 on Tuesday.
South32 [JSE:S32], which was unbundled from BHP last year, was the biggest loser in the resources sector, shedding 3.49% to R32.59. Investors took profits after the share closed on an all-time high of R33.70 on Tuesday afternoon. The stock gained more than 24% over the previous 90 days.
BHP [JSE:BIL], which closed at R248.65 - just below its 52-week high of R249.49 - on Tuesday, traded 1.09% softer on Wednesday to R245.95. Anglo American [JSE:AGL] shed 1.09% to R237.23.
Glencore [JSE:GLN] was also lower after it closed on a 52-week high of R64.10 on Tuesday. The share was 0.83% down at R63.57 by Wednesday mid-morning.
Retail shares were a mixed bag. The Foschini Group [JSE:TFG] was the busiest share on the JSE in terms of value, with shares worth more than R380m being sold. It gained 1.65% to R141.30. Woolworths [JSE:WHL], on the other hand, was one of the biggest losers, losing 2.7% to R59.55.
Clover [JSE:CLR] revealed the severe effects of last year’s drought on its results on Tuesday, but the share price gained 2.93% to R13.90 on Wednesday. Clover’s revenue for the year to June 30 advanced by 2.4% to R10bn, but the operating profit fell by 44.3% to R314.5m. Headline earnings per share were 66.2% lower at 63.9c.
Comair [JSE:COM] was unchanged at R5.60, despite strong results for the past financial year. Headline earnings grew from 36.5 cents per share in the previous year to 67c/share, and the group ended the year with a cash balance of R938m. This is in sharp contrast with South African Airways, which still has not paid its suppliers for goods and services rendered in July.
