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JSE slides as it follows global trend lower

Aug 29 2017 18:07
Musa Makoni, EasyEquities

Cape Town - The JSE closed lower on Tuesday, mirroring the current downtrend in global markets.

The news on Tuesday morning that North Korea fired a missile over Japan, increased global security concerns. This immediately led to a spike in gold as the precious metal bounced on safe haven buying.

As a result Asian markets tracked lower in Tuesday’s session and the JSE followed suit.

Bidvest was on the losers' list once again as it lost 1.58% to close at R172 per share. Sappi and Intu Properties were also trading under pressure as they shed 2.58% and 1.22% respectively.

Most retail and financial stocks continued to trade under pressure despite a relatively firmer rand. In Tuesday’s session the rand managed to yet again break below R13/$ to reach an intra-day high of R12.95 against the greenback.
 
In terms of earnings releases, Sibanye Gold released a trading statement which indicated that it is expecting a loss of 324 cents per share and a headline loss of 147c per share for the six months ended 30 June.

This trading statement is no surprise given the acquisition of Stillwater Mining in the US, and investors should expect decreased earnings in the medium-term until the new acquisition starts feeding into the stock's earnings. Sibanye Gold closed up 6.94%, mainly on the back of the commodity rally that we are seeing.

The JSE All-share Index closed 0.26% lower, while the Top 40 Index was down by 0.35%. The Resources Index was the only major index to close in the green as it gained 0.37%. The Industrials Index shed 0.53%, while the Financials Index lost 0.30%.

The US Dollar Index remained under pressure as it broke down 92 index points to reach an intra-day low of 91.621 index points. As a result, most dollar cross-currency pairs did strengthen against the greenback, with the euro/dollar in particular breaking out above 1.20 euros to the dollar.

Gold benefitted from the slump in the dollar as it continued to track higher in Tuesday’s session. It peaked to an intra-day high of $1 326.08 per ounce before retracing slightly to trade at $1 319.30 per ounce just after the JSE closed. As a result, JSE listed gold miners Gold Fields and Harmony Gold closed up 5.69% and 7.05% respectively.

The current commodity bull market saw platinum and palladium having yet another positive session. Palladium peaked to an intra-day high of $949.44 per ounce and just after the JSE closed it was trading at $948.35 per ounce.

Platinum managed to jump above $1 000 per ounce to reach an intra-day high of $1 006 per ounce. Platinum was trading at $1 001.88 per ounce just after the JSE closed.

Surprisingly, Brent Crude remained subdued despite fears of low US supplies due to Hurricane Harvey. After opening at $52.04 per barrel the commodity was trading below that $52 per barrel for the greater part of Tuesday and was recorded at $51.33 per barrel just after the JSE closed.

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easyequities  |  markets  |  equities  |  jse
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