JSE edges lower in thin trade ahead of busy week

The JSE opened the week on a negative note on Monday, closing lower in broad-based losses, weighed down by disappointing corporate results.

Volumes were low, at R9bn, compared to the average R20bn, with closed US and UK markets subduing activity.

European bourses opened higher, but then did an about-turn, due to political turmoil in Italy. Efforts to form a eurosceptic coalition government there were stymied on Monday, with some analysts saying further euro weakness was likely.

Miners and general retailers led the losses, while the industrial index was higher on gains by Naspers.

Food and drug retailers also rose marginally, due primarily to a positive performance by Shoprite.

Retailers had come under some pressure last week, when the Reserve Bank indicated that no further interest-rate cuts were likely in 2018, and the next move would probably be an increase.

The answer to whether or not the current retail recovery would accelerate or decelerate would depend in large part on the direction of retail prices and interest rates, which would take their cue from price trends, said Investec Wealth and Investment chief economist Brian Kantor.

The week, notably Wednesday, is busy in terms of corporate announcements.

The all share fell 0.11% to 56,857.2 points, while the top 40 was flat. Industrials gained 0.17% and food and drug retailers 0.24%. Platinums lost 2.35%, general retailers 0.65% and financials 0.19%.

Sasol dropped 2.05% to R454.50.

Shoprite added 1.11% to R233.54 while Clicks fell 2.14% to R208.20.

Steinhoff Africa Retail slumped 5.59% to R16.90, ahead of the release of its interim results to end-March on Tuesday. The company said on Friday it expected earnings to plunge 52%.

Reunert fell 4.6% to R77 after reporting earlier that net profit dropped 4% to R448m in the six months to end-March, due to an “unprecedented” reduction in demand for its services from state-owned companies.

Tongaat Hulett gave back 2.75% to R85.36 after earlier slashing its final dividend for the year to end-March by two-thirds to 60c, citing depressed international sugar prices and foreign competition.

Telkom dropped 3.6% to R51.70, after earlier reporting headline earnings per share for the year to end-March dropped almost a fifth, due to flat revenue growth and a higher effective tax rate during the period.

At 5.30pm the CAC 40 had fallen 0.57% and the DAX 30 0.4%.

At the same time platinum was up 0.51% to $904.72 an ounce while gold had lost 0.2% to $1,298.90. Brent crude was 1.14% lower at $75.25 a barrel.

The top 40 Alsi futures index fell 0.12% to 50,761 points. The number of contracts traded was 10,796 from Friday’s 17,901.