JSE closes lower as strong dollar weakens mining stocks
The JSE closed weaker on Tuesday as miners fell on a rampant dollar, while a strong opening by Naspers faded towards the close.
Retail stocks came under pressure, with Massmart and Steinhoff losing ground.
The dollar steamed ahead to new heights against the euro, reaching $1.1838 in intra-day trade; in the middle of March it was at $1.25. Spot gold slipped 0.45% to $1,308 an ounce and platinum was unchanged at $910.
Mining stocks were on the back foot, despite a weaker rand, ahead of US President Donald Trump’s expected announcement that the US will withdraw from the Iran nuclear deal.
Platinum stocks were hard hit, with lower production reported at Impala Platinum. The gold price retreated on the strong dollar with the rand losing 10c against the greenback.
Brent crude was off Monday’s firmer levels, when it hit $76 a barrel. Trade was cautious against a backdrop of heightened tensions in the Gulf and supply constraints, BlackRock analysts said. They warned geopolitical tension in the Middle East could flare up further in the near term, particularly between the US and Iran.
Oil supply could also tighten if oil cartel Opec extends production cuts into June, or Venezuelan production falls further. Despite this, the rise in oil prices was unlikely to pose a significant drag on the global economy and its effect on core inflation should be minimal, BlackRock said.
Sasol failed to benefit from the little-changed Brent crude price, despite the rand falling to R12.6246 to the dollar. Brent was last seen at $75.37 a barrel.
After opening 2% higher, Naspers ended the day firmer, but off intra-day best levels after Chinese internet company Tencent rose nearly 3% in Hong Kong trade. Tencent is the main driver of Naspers’s share price, with the latter owning about 31% of the former.
Focus was also on property stocks with Rebosis closing higher after reporting an increase of 5% in its first-half dividend on Tuesday, which it said was line with market guidance. Hyprop closed lower after it raised R782.6m in an accelerated book-build on Tuesday, beating its target of R600m.
The all share closed 0.37% lower at 57,665.20 points and the top 40 dropped 0.29%. General retailers fell 2.72%, the platinum index 2.37%, food and drug retailers 1.39%, banks 1.07%, and the gold index 0.99%.
BHP Billiton was 1.13% lower at R271.31. Kumba Iron Ore shed 4.42% to R270.
After plunging 17% at one point, ArcelorMittal SA closed 1.43% off at R2.76. The group announced earlier that Dean Subramanian had resigned as its chief financial officer after nearly three years on the job.
Impala Platinum plummeted 7.56% to R19.80 after reporting that refined platinum production decreased by 4.5% in its fiscal third quarter due to a technical problem with one of its furnaces.
Massmart lost 3.06% to R153.18.
Rebosis closed 3.13% higher at R8.25, but Hyprop lost 2.79% to R107.15.
Naspers rose 1.3% to R3,074.49.
The top 40 Alsi futures index lost 0.80% to 51,210 points. The number of contracts traded was 34,063 from Monday’s 10,940.