JSE opens weaker in cautious trade

The JSE all share opened lower on Wednesday morning as investors stood on the sidelines ahead of the expected hike in interest rates by the US Federal Reserve later in the day.

Traders on the JSE were reluctant to take significant positions at the opening, with volumes not exceeding R1bn 45 minutes after the opening.

The market has priced in a 100% likelihood of a US hike, but would probably take a more cautious look for the rest of the year and 2019 as the impact of the trade war between the US and China is still uncertain.

Higher oil prices have created new worries, as higher energy prices usually have inflationary consequences. This could come at an inopportune time, with US GDP growth steaming ahead and as the Fed tightens monetary policy.

Brent crude rose above $82 a barrel soon after the opening of the market.

The rand was marginally firmer at R14.2912 to the dollar from R14.3506.

The Dow closed 0.26% lower on Tuesday in choppy trade as the market shrugged off renewed upbeat consumer data in the US, with the consumer confidence index rising more than expected in September.

US inflation remains elevated above the Fed’s targeted 2% with markets already pricing in a further hike in December, analysts at Nedbank Corporate and Investment Banking said in an early-morning note.

Asian markets were higher, with the Nikkei 223 up 0.39%. The Shanghai Composite gained 0.92% and the Hang Seng 1.13% amid hope that the MSCI would increase the weight of large-cap Chinese stocks in its global benchmarks.

At 9.46am the all share had slipped 0.37% to 56,670.30 points and the top 40 had lost 0.29%. The gold index shed 2.2%, platinums 1.38%, resources 0.99% and food and drug retailers 0.49%. Banks edged up 0.08%.

Anglo American lost 1.25% to R326.85.

Sibanye-Stillwater was down 2.84% to R8.88.

Capitec rose 0.73% to R971.06 as interim results to end-August came in largely as expected.

FirstRand shed 0.62% to R69.21 but Standard Bank gained 0.65% to R177.30.

Growthpoint added 0.95% to R23.33 but Hyprop lost 3.29% to R90.92.

MTN rose 0.78% to R82.80 amid speculation it might be a takeover target by China Mobile.

Naspers was up 0.07% to R3,187.01.

Sappi dropped 1.8% to R90.16.