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Johannesburg - Resources shares have been under pressure globally on Thursday and the JSE was no exception.
In fact, the resources index on the JSE - which lost almost 13% over the past 30 days - is now trading at levels last seen in September last year. The index was by midday on Thursday another 2.02% lower at 30 292 points after it traded as recently as 26 January at 35 550 points.
The resources index also pulled the rest of the market lower and the All-share-index dropped to below 51 000 points. The Top 40-index was also below 44 000 points.
The reason for resources shares' demise was the strong dollar, which made commodities more expensive in other currencies. Prices of basic commodities dropped on Thursday morning to the lowest level in seven weeks.
The dollar was firm on Thursday after a surprising reports on job creation in the US made a rate hike later this month a near certainty.
The ADP employment report showed private US payrolls increased by 298 000 last month - far above expectations.
Tom Porcelli, chief US economist at RBC Capital Markets, said the report was so strong that it meant the payrolls report on Friday would have to be unbelievably dire to deter the Fed from hiking next week.
"There is almost no number that would stop them," said Porcelli. "It would take an extreme event for the Fed to take a pass at this point."
The rand also dropped back against the strong dollar and traded at midmorning at R13.24, but it did not do much to support share prices.
By midmorning the All-share index was already 0.79% softer at 50 895 points and the Top 40-index was already 0.86% softer at 43 944 points. The-All-share index lost almost 4% over the past month and is only 0.93% higher over the previous thirty days. At that stage the industrial index was 0.20% softer and the financial index traded 0.50% lower.
By midmorning Anglo American [JSE:AGL] traded another 1.96% lower at R188.27, which is the lowest since 9 January when the share traded at R191.00 The share has now lost more than 15% over the past thirty days after it was on 31 January at a 52-week high of R235.24.
BHP Billiton [JSE:BIL], which is more than14% lower over the previous thirty days, traded another 1.99% softer at R204.20. The share is now the lowest since 7 November last year when it traded at R202. BHP Billiton traded on 23 January at a 52-week high of R249.22.
Glencore [JSEGLN] was 2.41% down at R50.80, but the share did not drop as much as the other conglomerates over the past month. It is only 5.26% softer over the previous thirty days after it traded on 31 January at a high of R55.67.
The one bright point was Sanlam [SLM], which reached an intra-day high of R71.40 in early trade. The share lost momentum with the rest of the market, but was still 1.49% higher at R69.46.
The strong performance was the result of strong trading results announced on Thursday for the past financial year. The group said the net value of new covered business was up 18% to R1 605m. Net fund inflows was R41bn compared to R19bn in 2015.
Santam [JSE:SNT], Sanlam short term subsidiary, traded 0.32% higher at R249.31, but was as high as R259.31. The company increased its dividend with more than 9% last week.
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