MARKET WRAP: Gains by gold and platinum miners fail to buoy JSE

The JSE closed a little lower on Wednesday, in somewhat cautious trade as investors await US non-farm payrolls data on Friday.

The rand was stable, but interest rate-sensitive shares were again under pressure. These include retailers and banks.

It was difficult to pinpoint a reason for the recent underperformance of banks, said portfolio manager at FNB Wealth and Investments Edgar Mafoko. Their underperformance could reflect some investor nervousness due to the conflict between President Cyril Ramaphosa and public protector Busisiwe Mkhwebane, who has accused Ramaphosa of not upholding his constitutional duty.

Liquidity in the market was also a bit low, which may also be a factor, said Mafoko.

US markets close early on Wednesday and are closed on Thursday, while US non-farm payroll numbers on Friday is the major international data release this week, and activity is expected to be subdued until then.

Rand hedges performed best on the day, even though the rand was flat at R14.0984/$ as the JSE closed.

The all share fell 0.14% to 58,012.2 points and the top 40 0.25%. Banks fell 1.13% and general retailers 0.65%. Gold miners added 1.68% and the platinum index 1.42%. Gold was up 0.16% to $1,420.16/oz and platinum 0.98% to $841.91.

Oil prices fell a sharp 4.02% on Tuesday, but recovered a little on Wednesday, after data showed that US oil inventories had fallen. Brent crude was last seen 0.67% higher at $62.99 a barrel.

The Dow was up 0.26% to 26,786.68 points, while in Europe, the FTSE 100 had gained 0.67%, the CAC 40 0.66%, and the DAX 30 0.64%.

Earlier, the SA Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) rose to 93.3 in June from 93.0 in May. The BCI has been below 95 for the past five months, and remains lower than it was a year ago. A full Sacci report containing details is expected on Friday.

Global focus was on rapidly falling bond rates, including on the German 10-year bund, whose yield earlier fell to an all-time low. bond yields move inversely to bond prices.

The yield on the 10-year US treasury also fell below 2% for the first time in three years, amid concern that the US-China trade war may not resolve itself as quickly as hoped, and fears of an impending tariff war between the US and Europe.

Something that was also providing expectations of a dovish tone by the market is the nomination of Christine Lagarde as chair of the European Central Bank (ECB), said Oanda analyst Dean Popplewell. Many believe that she is willing to provide the market with further stimulus.

Diversified miner Glencore fell 1.27% to R48.83 and Anglo American 2.39% to R391.75.

Rand hedge AB InBev gained 3.97% to R1,324.49 and British American Tobacco 2.35% to R526.77.

Harmony Gold firmed 3.66% to R31.42, Sibanye-Stillwater 2.54% to R16.15, and AngloGold Ashanti 2.07% to R250. Northam Platinum rose 3.67% to R62.16 and Royal Bafokeng 2.75% to R35.45.

Afrimat jumped 5.67% to R33.55. It said earlier that it had given up on its plans to buy Australian-listed Universal Coal.

Truworths fell 2.14% to R67.38, extending Tuesday’s 5.03% loss, this after it confirmed media reports that its UK-subsidiary, Office, is seeking to restructure its debt.

FirstRand was the biggest loser among the major banks, down 1.76% to R65.97.

gernetzkyk@businesslive.co.za