MARKET WRAP: JSE closes slightly off after nine-day winning streak
The JSE closed weaker on Thursday — its first day of losses in 10 sessions, during which it reached six record highs — as industrials and miners pulled back on the firmer rand.
Local data was upbeat. Mining production increased by a significant 6.9% year on year in August‚ after increasing by 0.9% year on year in July. Analysts had expected a contraction‚ but this was mainly due to a high base in August last year. The release has raised expectations for SA’s economic performance in the third quarter.
Retailers, banks, financials and property stocks gained on the day after the rand strengthened 0.40% to the dollar to R13.4535, its best level so far this month.
Minutes released by the US federal open market committee were interpreted by markets as being rather dovish, after some policy makers expressed reservation as to the outlook for inflation. Analysts said this likely meant an increase in December, but that it called into question three rate increases pencilled in by the Fed for next year.
Mixed European markets and a soft opening on the Dow added to the subdued sentiment on the JSE with volumes hitting R15bn by the close, lower than the daily average of R20bn.
The all share closed 0.04% lower at 57,747.30 points and the blue-chip top 40 0.17%. Platinums lost 1.46%, the gold index 1.16%, resources 0.73% and industrials 0.15%.
General retailers added 1.36%, food and drug retailers 1.05%, banks 0.94%, financials 0.80% and property 0.42%.
On Thursday, investors appeared ready to begin lightening their exposure to a few counters which had enjoyed a decent run in the past nine trading days. The loss of momentum was also partly attributable to the continued recovery in the rand that held back big dual-listed shares, which invariably set the direction for the market.
Aspen Pharmacare was the best performer among blue-chip companies, adding 4% to R319.19.
Rand-hedge British American Tobacco dropped 1.4% to R864.32 and Richemont 1.08% to R123.74.
Gold Fields lost 2.88% to R54.36 and AngloGold Ashanti 1.17% to R125.66. Trading ex-dividend Harmony added 0.69% to R24.83.
The rand held steady at firmer levels in late trade, last seen at R13.4737 to the dollar.
South African bonds struggled to hold onto firmer levels despite the recovery in the rand. The benchmark R186 was last bid at an unchanged 8.68%.
The top-40 Alsi futures index was down 0.13% at 52,099 points.