MARKET WRAP: JSE closes lower in risk-off trade on hawkish US Fed
Risk-off sentiment on global markets and a series of mixed corporate results provided the JSE with much of its direction on Thursday, with retailers the only major index to rise, after the market reacted positively to results from Massmart.
The release of the minutes of the US Federal Reserve’s January meeting on Wednesday had seen the Dow reverse earlier gains, with a spillover effect for global equity markets on Thursday.
While three US interest-rate increases in 2018 were now strongly priced in – with a more than 50% likelihood -there was potential for a fourth, and more again in 2019, said Oanda analyst Craig Erlam. This appeared to be worrying investors and shaking confidence in equity markets.
Locally, reaction to corporate results was mixed. British American Tobacco fell more than 4%, while Sibanye-Stillwater’s statement sunk the gold index, which lost just over 4%.
The all share fell 0.77% to 58‚155.1 points and the top 40 0.91%. The gold index lost 4.1%‚ platinums 2.55%‚ financials 0.9% and banks 0.82%. General retailers added 2.4%.
British American Tobacco fell 4.31% to R695.22‚ despite the company earlier upping its dividend by 15.2% to 195.2p.
Sibanye-Stillwater plummeted 16.36% to R11.30, after it decided not to pay a final dividend, having incurred a R4.4bn loss in the year to December.
Massmart surged 8.81% to R155 after earlier reporting a 13.6% rise in full-year net profit to R1.5bn for the period to end-December.
Anglo American gained 0.12% to R289‚ after earlier reporting that operating profit grew to $5.5bn in the year to end-December‚ up 223% from the $1.7bn in the prior comparative period.
Resilient slumped 10.32% to R69.95 and Fortress B 10.83% to R16.05.
Shortly after the JSE closed the Dow was up 0.65%‚ while major European equity markets were lower. The FTSE 100 was off 0.9%‚ the DAX 30 0.72% and the CAC 40 0.23%.
At the same time gold had gained 0.34% to $1‚328.76 an ounce and platinum 0.48% to $993.81. Brent crude was 0.86% higher at $65.58 a barrel.
At 5.40pm the Dow was up 0.77% to 24‚990.83 points. In Europe‚ the FTSE 100 had slumped 1.26%‚ the DAX 30 0.89% and the CAC 40 0.39%.
At the same time gold was up 0.39% to $1‚329.54 an ounce and platinum 0.35% to $992.11. Brent crude had gained 0.51% to $65.40.
The top-40 Alsi futures index fell 1.06% to 51‚190 points. The number of contracts traded was 17‚083 from Wednesday’s 23‚393.