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Johannesburg - Share prices on the JSE took a breather on Tuesday after Monday’s strong run, and most of the major indices drifted slightly lower in morning trade.
The modest losses were in line with the FTSE index in London, with other European markets also opening slightly lower.
Analysts said that with strong global growth and low inflation, shares are currently the best investment option, but the market needs to let off steam sometime.
The rand was slightly lower against a stronger dollar - normally good news for dual-listed stocks, but it did not have much influence on Tuesday.
The dollar edged higher, supported by a rise in Treasury yields following a report that US President Donald Trump was favouring a policy hawk as the next head of the Federal Reserve. Higher US interest rates are negative for emerging market shares.
The All-share index opened marginally higher but then moved sideways for the rest of the morning and by mid-morning the index was 0.40% lower at 57 931 points. The Top 40 index followed the same pattern and at mid-morning was 0.37% lower at 51 525 points. The All-share index is almost 11% higher over the past three months.
The Industrial index, the big driver of the market, was 0.53% lower at mid-morning, with the Financial index also 0.25% softer. The resources sector, which made a strong run on Monday, shed 0.21% after trading in the black for most of the morning.
Resources shares are supported by higher metal prices in anticipation of higher global growth. The Gold index dropped 2.37% after the gold price was driven 1.12% lower by the stronger dollar to below $1 300 per ounce at $1 289.24/oz.
Naspers [JSE:NPN], by far the biggest share on the JSE and in the Industrial index, was 0.45% lower after it gained 2.74% over the previous seven days. Remgro [JSE:REM], which gained a solid 4.06% over the previous week, also took a breather and traded 0.39% softer at R227.00.
Richemont [JSE:CFR] was 0.35% lower at R120.70, but British American Tobacco bucked the trend and gained 0.67% to R860.54. Steinhoff lost 2.38% to R58.96.
Discovery [JSE:DSY] made a strong move in the financial sector and gained 1.59% to R145.68. Before Tuesday’s trade the share price was already 3.54% higher on news that the group has been granted a banking licence.
Sanlam [JSE:SLM], which gained more than 6% over the previous seven days, also took a breather and shed 0.91% to R71.65.
Iron producer Kumba [KIO], which gained more than 12% over the previous two days on reports that Chinese steel makers are importing more quality iron ore to clean up the environment in China, was only 52 cents or 0.20% higher at R257.52. That was enough to establish another 52-week high of R257.52. Kumba’s share price gained more than 69% over the past 90 days.
Among the commodity giants that were all trading at 52-week highs, Anglo American [JSE:AGL] and Glencore [JSE:GLN] both lost ground on Tuesday. Anglo was 0.39% softer at R261.03 and Glencore lost 0.49% to R67.32. BHP [JSE:BIL] was however 0.40% stronger on another 52-week high of R252.95.
Commodity shares have made strong runs recently, with Anglo 67.32% higher over the previous 90 days and Glencore gaining 40.58% over the same period.
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