MARKET WRAP: JSE drops as oil price climbs, with banks slumping 2.5%
Banks and retailers are under pressure from a rising oil price, after Opec rebuffs Trump's call for increased output
The JSE began the shortened week on a negative note on Tuesday, with banks and platinum miners falling the most in mildly risk-off trade.
The rand was stable, while the dollar trod water ahead of the start of US Federal Reserve monetary policy meeting this week. The Fed is widely expected to announce a 25 basis point interest-rate increase on Wednesday.
A rising oil price put local interest rate-sensitive stocks on the defensive, with banks faring slightly worse than retailers. Oil pushed to fresh four-year highs on Tuesday, after oil cartel Opec dismissed recent calls from US President Donald Trump to increase production, saying the market was adequately supplied. Tension in the Middle East also increased a little at the weekend, after Tehran accused Saudi Arabia of supporting a group of Arab separatists who launched a terrorist attack on Saturday.
Local focus this week will be on producer inflation data, due on Thursday. Inflation in August is expected to have moderated slightly from the previous month, due to the fuel-price reprieve and continued muted food price inflation, said Investec economist Lara Hodes.
The all share fell 0.49% to 56,882.8 points, and the top 40 0.64%. Gold miners gained 3% and resources 2.03%. Banks fell 2.65% and financials 1.53%.
Diversified miner Glencore gained 2.63% to R64.35, BHP 2.29% to R319.68, and Anglo American 1.5% to R331.
Sasol jumped 3.85% to R559.65.
Rand hedge British American Tobacco fell 1.41%, AB InBev 1.45% to R1,305.25 and Richemont 1.37% to R119.15.
Alexander Forbes rose 2.27% to R4.96, after earlier announcing it had fired CEO Andrew Darfoor.
Capitec softened 1.15% to R964 ahead of its interim results to end-August on Wednesday. The group said earlier this month it expected headline earnings per share (HEPS) to rise by between 18% and 21% compared to the prior period.
Standard Bank slumped 3.99% to R176.15, despite saying earlier that it may be close to resolving its issue with Nigerian authorities over alleged irregular transfer of MTN funds out of that country. MTN rose 2.64% to R82.16, with the market also digesting news of a possible tie up with rival Telkom.
Ascendis Healthcare gained 0.95% to R10.60, having earlier reported that group revenue rose 21% to R7.7bn in the year to end-August.
Shortly after the JSE closed, the Dow was up 0.1% at 26,588.88 points, while in Europe, the FTSE 100 was up 0.6%, the CAC 40 0.07% and the DAX 30 0.11%.
At the same time, gold was up 0.34% to $1,202.72 an ounce while platinum was flat at $827.70. Brent crude was 0.96% firmer at $82.17 a barrel.