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Global equity rout weighs on the JSE

Mar 28 2018 20:14
Musa Makoni, EasyEquities

Cape Town - A sharp sell-off in US equity markets on Tuesday and Asian equities on Wednesday filtered onto the JSE as the local bourse closed sharply lower.

On a positive note local consumers found some reprieve following the South African Reserve Bank’s decision to cut the repo rate by 25 basis points. This puts the repo rate at 6.5 per annum, and the prime lending rate at 10% per annum.

The JSE opened lower and traded under pressure for the entirety of Wednesday's session. The global sell-off was triggered by a slide in the Nasdaq index in the US, which came under pressure following a sell-off in tech giant Alphabet. Technology stocks took the biggest hit and on the Hang Seng,Tencent Holdings came under significant pressure to end the day down 4.63%.

On the JSE, Naspers [JSE:NPN] also traded under pressure and it dragged the blue-chip index with it. The stock lost 6.33% to close at R2 931.93 per share. Sanlam [JSE:SLM] and Assore [JSE:ASR] were among the day’s biggest losers after they lost 8.78% and 3.72% respectively, whilst Discovery [JSE:DSY] and Dis-Chem [JSE:DCP] shed 5.32% and 4.16% respectively.

Banking stocks traded under pressure due to the weaker rand, which saw First Rand [JSE:FSR], Barclays Africa [JSE:BGA] and Nedbank [JSE:NED] shedding 3.1%, 3.44% and 2.51% respectively. Retailers Pick n Pay [JSE:PIK] and Mr Price [JSE:MRP] lost 3.07% and 0.76% respectively. Despite a relatively decent set of earnings results, EOH Holdings [JSE:EOH] came under pressure to close at R46.00 per share, down 4.17% for the day.

Stadio Holdings [JSE:SDO] and Nampak [JSE:NPK] were among the day’s biggest gainers after they climbed 9.03% and 3.69% respectively. Impala Platinum [JSE:IMP] and Royal Bafokeng Platinum gained 4.66% and 1.88% respectively. British American Tobacco [JSE:BTI] and Growthpoint Properties [JSE:GRT] were the biggest gainers on the blue-chip counter as they closed the day up 3.55% and 2.42% respectively. Mediclinic [JSE:MEI] and Reinet [JSE:RNI] also added 2.23% and 2.05% respectively.

The JSE All-Share Index closed the day down 2.30% and whilst the JSE Top-40 Index lost 2.59%. All the major indices on the JSE closed in the red with the Financials Index taking a knock of 2.85%, whilst the Industrials and Resources Indices lost 2.73% and 1.01% respectively.

The rand weakened against the greenback on Wednesday as the US dollar inched higher, as well as a result of the interest rate cut from the SARB. The rand weakened to a session low of R11.80 against the greenback, before it retraced slightly to trade at R11.77/$ at 17:00 CAT.

Gold came under pressure is the result of the US dollar strength. At 17:00 CAT it was trading at $1 331.31/Oz, down 1.3% for the day.

At 17:00 CAT, platinum was trading at $937.22/Oz, palladium at $973.70/Oz and Brent Crude was recorded at $69.76/barrel.

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