MARKET WRAP: JSE weakens as oil hits $80 a barrel
The JSE was weaker on Wednesday, under some pressure as Brent crude breached the $80 a barrel level for the first time in four months.
Signs that US sanctions on Iranian oil exports are having a quicker effect than expected, as well as Hurricane Florence due to make landfall the US, has lifted the price of Brent crude to the psychologically important level.
Banks were weaker, despite a stable rand. Higher oil prices tend to stoke inflation, and improve the likelihood the Reserve Bank will raise interest rates. Miners were firmer, as most commodities rise in tandem with the price of oil.
Local news was mixed. The South African Chamber of Commerce and Industry (Sacci) business confidence index for August earlier showed a decline of 4.2 points from July’s 94.7. Retail sales for July, however, matched consensus expectations, rising 1.3% year on year in July.
The all share fell 0.4% to 55,952 points and the top 40 0.45%. Banks fell 2.56% and general retailers 1.57%. Gold miners gained 1.88%, resources 0.77% and the platinum index 0.64%.
Glencore firmed 1.7% to R57.45.
FirstRand fell 3.46% to R66.40, Absa 2.87% to R149.70 and Standard Bank 2.66% to R172.82.
Clover fell 0.74% to R14.78, having earlier reported that it had swung into a headline loss in its full-year to end-June as a result of a R469m impairment at its milk-supplying subsidiary.
Quantum Foods leapt 11.11% to R4.50, after saying earlier that headline earnings per share (HEPS) would rise at least 129% in the year to end-September.
Oceana Group gained 4.31% to R88.88, after saying earlier that basic HEPS would increase by between 62% and 82%, largely due to the once-off release of deferred taxation following US corporate tax cuts.
Impala Platinum lost 0.48% to R16.73 ahead of its results for the year to end-June on Thursday. The company said in August that it expected HEPS to decline by between 18% and 36% compared to the prior period.
Shortly after the JSE closed, the Dow was flat at 25,968.31 points, while in Europe the FTSE 100 had gained 0.43%, the CAC 40 0.66% and the DAX 30 0.4%.
At the same time, platinum had firmed 0.34% to $794.10 an ounce while gold had slipped 0.14% to $1,196.98. Brent crude was 0.6% higher to $79.87 a barrel.
The top 40 Alsi futures index gained 0.38% to 50,020 points. The number of contracts traded was 34,603 from Tuesday’s 36,459.