JSE falls as dollar surges, with banks dropping 4%
The JSE fell more than 1% on Tuesday, with banks and retailers faring worst, as global markets came under pressure from rising US bond yields and a higher oil price.
Interest-rate sensitive stocks and those with a focus on the domestic economy fell, although market heavyweight Naspers led the losses, falling 3.94% to R3,100.
Gold miners were also under strain, with the price of the precious metal falling below $1,300 an ounce for the first time in six months.
Earlier, strong US retail sales data buoyed the dollar, while the price of Brent crude reached $79 a barrel, before pulling back. This helped push the yield on US treasuries above 3%. Higher bond yields tend to dull investor interest in equities, particularly banks and some property stocks, as they raise borrowing costs for companies and consumers.
The Dow snapped an eight-session winning streak on the rise in yields, although European markets were marginally positive. Despite the upbeat corporate earnings season in the US, the market’s reaction has been sluggish, reflecting investor concern that earnings may be nearing a peak, said BlackRock global chief investment strategist Richard Turnill.
The all share gave back 1.23% to 57,891.8 points and the top 40 1.28%. Banks fell 4.5%, general retailers 3.21%, and financials 2.34%.
Diversified miner BHP rose 2.17% to R292.01 and Glencore 1.01% to R64.75. Sasol gained 2.64% to R472.
Rand hedge British American Tobacco lifted 2.28% to R650.73.
Standard Bank plummeted 4.84% to R206.88, FirstRand 4.55% to R63, Nedbank 4.12% to R294.82, Barclays Africa 4.06% to R173.65, and Capitec 3.83% to R840.52.
TFG fell 4.44% to R198.86, Truworths 4.03% to R92.48, and Mr Price 3.26% to R252.50.
MTN lost 3.42% to R120.82.
Investec Property Fund lost 0.34% to R17.59, despite earlier declaring a final dividend of 70.16c, taking its total for the year to end-March to 138.53c, an 8.5% increase on the previous year’s 127.65c.
At 5.30pm, the Dow had dropped 0.8% to 24,699.38 points, while in Europe, the FTSE 100 had gained 0.32% and the CAC 40 0.18%, while the DAX 30 was flat.
At the same time, gold had slipped 1.4% to $1,294.77 an ounce and platinum 1.34% to $899.02. Brent crude was 0.33% higher at $78.73 a barrel.
The top 40 Alsi futures index fell 1.17% to 51,735 points. The number of contracts traded was from 21,930 Monday’s 13,039.