JSE closes lower as global monetary policy tightening looms
The JSE closed lower on Thursday after a volatile session, weighed down in late trade by the prospect of reduced liquidity in world financial markets from next month.
The rand fluctuated as the market digested minutes from both the European Central Bank (ECB) and US Federal Reserve policy meetings in July. Analysts said the minutes decreased the likelihood of interest-rate increases, but raised the prospect of synchronised monetary policy tightening as early as next month.
The all share closed 0.21% lower to 55,534.6 points and the blue-chip top 40, 0.3%
Investors also faced a spate of local earnings reports, including Standard Bank, which put pressure on rest of its sector.
Banks were off 0.54%, financials 0.49%, industrials 0.13% and resources 0.19%. The platinum index gained 0.94%, gold 2.07% and general retailers 1.52%.
Rand hedges were mixed, with Anheuser-Busch InBev adding 0.49% to R1,558.71, while Richemont was off 0.58% to R112.93. British American Tobacco fell 0.45% to R823, on ex-dividend trade. It is down 2.96% so far this week.
Gold Fields rose 4.71% to R54.48 after it earlier declared an interim dividend of 40c a share, despite a sharp drop in profits.
Sibanye Gold added 1.19% to R18.72, despite warning it would report an interim loss of at least R4.8bn‚ with a R2.8bn impairment against two gold mines it plans to shutter.
Exxaro lost 0.64% to R108 after earlier tripling its interim dividend to R3 from 90c.
Assore surged 4.28% to R234 after the diversified miner earlier forecast a big jump in its full-year profit‚ citing higher commodity prices.
Anglo American Platinum added 2.24% to R328.22 and Impala 1.28% to R37.90.
Vehicle parts maker Metair rose 2.79% to R19.89, after reporting it had more than doubled its headline profit in the six months to end-June.
Standard Bank lost 1.06% to R162.13, after it announced it had achieved a slightly higher interim profit, from slightly lower revenue, in the six months to end-June.
Barclays Africa was off 1.2% to R147.89 and Nedbank 1.1% to R225.
Old Mutual lost 1.46% to R35.09, while Sanlam added 0.29% to R69.47.
PPC surged 9.17% to R3.81, after an operational update in which it reported that the group’s net debt position improved in June. It is down 20.13% so far this month.
In the retail sector, Steinhoff fell 1.78% to R65.12 and Italtile 2.17% to R13.50. Massmart was up 5.82% to R117, Truworths 4.53% to R79.86, and Woolworths 1.44% to R64.92.
Taste Holdings was up another 7.97% to R1.49, and is now up 23.14% this week.
On Thursday, the European Central Bank cited lack of inflation as a concern as it considers ending quantitative easing amid signs of sustained economic growth.
The minutes painted the picture of a central bank that did not want to pull the plug too soon on its large bond-buying programme, reported Dow Jones Newswires. Barclay’s Research analysts said quantitative easing in the eurozone was expected to continue into 2018, but the programme was likely to be gradually pared back, starting in the next two months.
On Wednesday‚ the US Federal Reserve’s policy meeting minutes indicated division among policy makers as to the timing of future interest-rate increases. Despite this, they still agreed with the central bank’s plan to begin winding down its balance sheet soon, the newswire said.
Shortly after the JSE closed the Dow was down 0.53% to 21,908.13 points, the Nasdaq 0.87% and the S&P 500 0.56%.
At the same time the FTSE 100 had fallen 0.63%, the CAC 0.67% and the DAX 0.54%.