JSE closes lower as banks retreat on recession news, while miners gain on rand
The JSE closed weaker on Tuesday as retailers and banks retreated sharply after the news that SA’s economy had technically entered a recession. Mining stocks, however, benefited from the softer rand and higher commodity prices. The release of GDP data earlier in the day showed the economy had contracted 0.7%, the second consecutive quarterly contraction from 0.3% in the fourth quarter in 2016. This was technically a recession — the first since 2008, when the economy recorded three quarters of contraction. The consensus expectation was for GDP growth of 1% in the first quarter. Analysts said the market and the rand’s reaction was relatively muted as most of the bad news was already priced in. "The reality is that SA’s growth has been slipping sharply since 2011," Citadel financial partner Maarten Ackerman said. For the past few years, population growth has outstripped economic growth, he said, which implied that on a per-person basis, SA had become poorer despite positive economic gr...
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