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Johannesburg - Stronger expectations of an imminent rate hike in the US hammered global markets on Friday and the JSE was no exception, with the All-share index losing almost 1% in early trade.
Higher interest rates also mean a stronger dollar, which clobbered commodity prices on a wide front, pushing them sharply lower.
The Resources index was as expected the biggest loser on the JSE, shedding almost 2% in early trade. By mid-morning it was still 1.60% lower. The Gold index lost 3.84% after the gold price suffered its biggest one-day decline since December on Thursday.
The other major indices also followed global markets lower. The Financial index lost 0.89%, while the Industrial index was 0.72% softer.
As a result the All-share index was already 0.88% down at 51 436 points by mid-morning, while the Top 40 index lost 0.96% to 44 407points.
Various top officials from the US Federal Reserve made comments this week about the need for higher US interest rates; the implied probability of an interest rate hike move this month shot to 74%, from just 30% at the start of the week.
The chair and vice-chair of the Fed, Janet Yellen and Stanley Fischer, are due to speak later in the day and both are expected to deliver the same message.
“Markets have finally decided that 'fairly soon' means less than two weeks and that perhaps three hikes this year means three hikes this year," said Sean Callow, a senior currency strategist at Westpac.
Even Wall Street paused on Thursday evening and on Friday morning Asian markets were down, with the MSCI's broadest index of Asia outside Japan losing 0.9% in the biggest daily drop so far this year. European markets were also lower, which had a negative influence on the prices of the JSE's dual-listed shares.
The major commodity conglomerates listed on the JSE were all lower by mid-morning. Anglo American [JSE:AGL] lost 2.32% to R202.96 and Glencore [JSE:GLN] was 1.93% softer at R53.45. South32 [JSE:S32], which made a strong run earlier in the week, lost 2.03% to R26.60 and African Rainbow Minerals [JSE:ARI] shed 2.17% to R101.80.
BHP Billiton [JSE:BIL] was only 0.65% softer at R216.00, but the share reached a low of R213.00 in earlier trade.
Sasol [JSE:SOL] lost 1.31% to R372.80 after oil prices took a blow from news that Russian crude production remained unchanged in February, showing weak compliance with a global deal to curb supply to tighten the oversupplied market.
Most of the major dual-listed shares on the JSE traded lower. Steinhoff [JSE:SNH], which is also listed in Frankfurt, was the busiest share on the JSE in terms of volume and turnover. More than 10.4 million shares were traded for more than R680m. The share price was 0.60% softer at R65.80, but traded as low as R64.20.
Naspers [JSE:NPN] lost 0.64% to trade at R2 106.50 and British American Tobacco [JSE:BTI] was 0.49% softer at R823.86. Richemont [JSE:CFR] lost 0.58% to R96.68.
The attention in the financial sector was on Standard Bank’s [JSE:SBK] efforts to turn the struggling Liberty group around. In early trade, Standard Bank’s share price was more than 6% down at R146.38 on news that the banking group’s headline earnings attributable to Liberty fell by 61% to R955m. By midmorning the share price was 1.09% down on R154.25.
The banking group’s headline earnings and headline earnings per share increased by 4% to R23bn and R14.40 per share, which the group said doesn’t reflect the operational momentum within the banking franchise.
Standard Bank said it has devised a “detailed action plan” to help Liberty Holdings recover from its short-term challenges and re-establish its competitiveness over the long term.
