MARKET WRAP: JSE closes lower as rand strength fails to lift banking stocks
The rand broke below R14/$ in intra-day trade on expectations that the US Federal Reserve will cut interest rates
The JSE closed lower on Thursday as a rally by the rand failed to lift banking stocks.
The rand dipped below R14 to the dollar in intra-day trade — its best level since mid-April — as expectations mount that the US Federal Reserve will cut interest rates this year, amid concern of a slowdown in global economic growth. Jitters about the decline in growth were further fueled by poor manufacturing data from the US, the eurozone and China this week.
By the JSE’s close, the rand had gained 0.16% to R14.0329/$, 0.12% to R15.8333/€, and 0.1% to R17.6548/£. The euro was flat at $1,1283. The rand earlier reached a best level of R13.9566/$.
After its good recent run, the gold price was down 0.24% to $1,415.01/oz. However, FXTM research analyst Lukman Otunuga said in a note that the challenging global economic conditions are likely to favour gold as it is considered a safe-haven asset. “The investment case for gold is set to remain robust as speculation mounts that major central banks will ease monetary policy in an effort to counter a global economic downturn.
“Gold shone with extreme intensity during the second quarter of 2019, rallying roughly 9% to levels not seen in more than six years, above $1435/oz. This was thanks to an environment that included ongoing global growth concerns, [problematic] geopolitics, trade tension and dollar weakness.”
Platinum was last seen down 0.69% to $833.46/oz. Brent crude was down 0.59% to $63.54 a barrel.
US markets were closed on Thursday for the Independence Day public holiday, this after the Dow reached a record high on Wednesday, while the S&P 500 came within five points of 3,000.
By 6pm on Thursday, the FTSE 100 and France’s CAC 40 were flat, while Germany’s DAX 30 had gained 0.11%. Earlier, the Shanghai Composite fell 0.33% and Hong Kong’s Hang Seng 0.21%, while Japan’s Nikkei gained 0.3%.
The JSE all share fell 0.31% to 57,829 points and the top 40 0.41%. Resources relinquished 1.01%, the platinum index 1.54% and banks 0.32%. Among the latter, Absa fell 0.72% to R169.41, Standard Bank 0.57% to R191.54, and Nedbank 0.33% to R246.89, while FirstRand was flat at R65.94.
Platinum miners Royal Bafokeng fell 6.06% to R33.30, Anglo American Platinum 1.98% to R805.48, Northam 1.38% to R61.30, and Impala 0.79% to R73.21.
Super Group rose 1.93% to R32.24 after the transport and logistics company said it had completed the acquisition of a 65% stake in LiebenLogistic,s and 51% of GLS Supply Chain Equipment.
Comair gained 3.49% to R3.85, despite the commercial airline company saying earnings per share and headline earnings per share for the financial year ending June 2019 are expected to be more than 20% lower than the previous corresponding period.
Afrimat’s share price reached a record high in intra-day trade after the building and materials company said on Wednesday that it would not proceed with the R2.1bn acquisition of Australia-listed Universal Coal. It closed 5.81% higher at R35.50 after earlier reaching R36.50.
Naspers fell 0.91% to R3,448.35, after its Hong Kong-listed subsidiary Tencent lost 0.11%.