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Johannesburg - The JSE traded lower in line with expectations on Thursday morning in reaction to news that the South African economy contracted 1.2% in the first quarter, but global markets were also lower on similar economic concerns.
Stocks around the world declined for the first time in six days and commodities reversed gains, as traders assessed the outlook for the global economy.
The result was that all the major indices on the JSE traded lower by mid-morning, with commodities the biggest loser. At that stage the All-share index was already 0.68% down at 53 592 points and the Top 40 index had lost 0.65% to 47 404 points. The Financial index was already 0.78% lower and the Industrial index had shed 0.36%.
The rand also retreated on Thursday as investor confidence was rattled by the disappointing growth figures, raising the risk of recession just as the country dodged downgrades by the leading credit rating agencies.
READ: Rand stumbles as recession risk rises
By mid-morning the rand had slipped 0.70% to R14.85 to the dollar, wiping out gains that saw the unit climb to a five-week high after Fitch affirmed South Africa's investment grade credit rating and maintained its stable outlook.
Globally the MSCI All-Country World Index dropped from a six-month high.
Global economic optimism has cooled because of weak US jobs data, a lower growth forecast from the World Bank and the UK’s looming referendum on quitting the European Union.
Commodity prices also reversed their overnight gains. The Bloomberg Commodity Index slipped after earlier advancing as much as 0.4%. Oil prices extended their overnight gains to reach an 11-month high, but by mid-morning Brent was again 0.72% lower at $52.34. Spot gold advanced to a three-week high of $1 266.01 an ounce, but at mid-morning traded 0.29% lower at $1 258.90.
By midday the Resources index on the JSE was already 1.72% down and the Gold index had lost 0.87%.
Sasol [JSE:SOL] responded to the reversal in the oil price by dropping 2.23% to R433.35. Anglo American [JSE:AGL] traded 2.67% lower at R146.41 and BHP Billiton [JSE:BIL] was also 2.67% softer at R189.66.
The big company news on Thursday was that the British group AstraZeneca has agreed to sell the commercialisation rights for its portfolio of anaesthetics outside the United States to Aspen Pharmacare [JSE:APN] for an initial payment of $520m.
READ:Aspen to buy AstraZeneca anaesthetics for R7.7bn
Aspen’s share price, which has been in the doldrums lately, gained 9.21% to trade at R50.51 and Aspen was the busiest share on the JSE in terms of value.
Naspers [JSE:NPN] lost 1.36% to R2 253.89, which meant the company’s market value will at closing time again be just below the milestone of R1trn reached last week. British American Tobacco [JSE:BTI] gained 0.36% to R918.00.
The world’s two biggest beer companies, both listed on the JSE, were marginally lower. Anheuser-Busch InBev [JSE:ANB] lost 0.13% to R1 923.56 and SABMiller [JSE:SAB] was 0.40% softer at R922.82.
There is still much trade in the shares of Bidcorp [JSE:BID] and Bidvest [JSE:BVT], after Bidcorp was recently unbundled from Bidvest and listed separately. Bidcorp lost 2.25%, trading at R256.00 - 5% lower than the listing price of R270 - while the stock is also more than 14% softer than the all-time high of R304 reached shortly after the listing.
The smaller Bidvest gained 0.43% to R134.33, and is now more than 8% higher than the listing price of R120.
