JSE drops for fifth session in a row amid twitchy global markets

The JSE closed lower for a fifth consecutive session on Monday, leaving the all-share index at its lowest point in about two weeks.

Largely reflecting the nervous sentiment on global markets, the all-share has been battling to find traction since its peak in late January, at 61,864.77 points.

Only big diversified miners such as Anglo American and BHP managed to post decent returns over the past six months, despite wobbly commodity prices.

Fears over a global trade war have held global markets hostage for the first half of 2018, as investors fixated on its potential fallout on the global economy.

The poor global sentiment coincided with the unwinding of Ramaphoria, which has played out particularly badly on stocks that focus mainly on the local economy.

Foreigners had piled into local stocks en masse between December and February in particular, anticipating an improvement in SA’s economic story, after the ruling ANC elected new leadership in December.

However, the buying frenzy, which sent numerous stocks to record levels, has since tailed off.

The all share index fell sharply, by 1.64% to 55,442 points on Monday, hurt by the combination of lower commodity prices, and broadly weaker global markets.

“There seems to be no liquidity either which exacerbates the problem. Technically we have been drifting sideways for a while and the index is still negative for the year. Not too sure where the catalysts will come from at this point. We have to wait and see,” said Vasilis Girasis, a trader at BP Bernstein Stockbrokers.

Brent crude dropped 3% to $72 a barrel in late trade on Monday amid expectations of higher output from major producers such as Saudi Arabia and Russia. The weaker oil price and a stronger rand hurt resource shares, in particular, on the day.

The platinum price was at a multi-year low of $820 an ounce, dragging Impala Platinum shares down nearly 9%, to R18, its worst level since June 1999.

Banks and insurance stocks fell, along with retailers, despite a relatively stronger rand, which usually acts in their favour in terms of relieving pressure on inflation and the outlook on interest rates.

MTN shares continued to lose ground, shedding 2% to R104.37, its lowest point since June 2010. Earlier in the day, Africa’s biggest mobile operator announced that it would sell its Cyprus business for R4bn.

Naspers, which forms a sizeable part of the all share, lost 2% to R3,301.42, hurt in part by the stronger rand.

The rand held onto its recent gains against the dollar, playing into arguments by some analysts that the local currency was oversold in the short term. The rand changed hands to the dollar at R13.23 in late trade, after flirting with R14 three weeks ago.

Local bonds held broadly steady at stronger levels, with the yield on the benchmark R186 bond last seen at 8.70% from 8.73%.

The top 40 Alsi futures index dropped 1.93% to 49,417 points. The number of contracts traded was 20,664 from Friday’s 18,256.