MARKET WRAP: JSE closes firmer but miners take a dip

The JSE gained on Wednesday but miners lost some ground after the US Federal Reserve threw cold water on market expectations of aggressive interest-rate cuts in the US.

Global markets were mixed after Fed officials downplayed the likelihood of a 50-basis-point rate cut at their next meeting, which had been partially priced in by the market.

After the JSE’s close, the Dow had fallen 0.67% to 26,548.22 points. In Europe, the FTSE 100 and Germany’s DAX 30 were little changed, while France’s CAC 40 was down 0.22%. In Asia, the Shanghai Composite fell 0.19% and Japan’s Nikkei 0.51%, while Hong Kong’s Hang Seng gained 0.13%. 

At 5.50pm, the rand had strengthened 0.83% to R14.2314/$, 0.64% to R16.2075/€, and 0.75% to R18.0753/£. The euro was a 0.17% firmer at $1,1388.

The benchmark R186 government bond was stronger, with its yield falling 3.5 basis points to 8.12%. Bond yields move inversely to bond prices.

Gold was under pressure after the Fed comments, and on track to break a six-session winning streak. The precious metal is seen as hedge against loose monetary policy, and has been in favour with investors recently. At 6pm it had fallen 0.7% to $1,413.46/oz, while platinum was up 1.32% to $819.14. Brent crude was 1.12% higher at $66.54 a barrel, amid concerns over escalating tension between the US and Iran.

The JSE all share rose 0.13% to 58,421.70 points and the top 40 0.24%. Gold miners fell 2.2% and the platinum index 2.43%.

Gold Fields dropped 4.17% to R76.71, Harmony 2.21% to R31.35, Sibanye 2.14% to R16.49, and AngloGold Ashanti 0.99% to R246.83.

Sibanye announced earlier that it will sell a 51% stake of its Marathon copper project to Canadian company Generation Mining. The project, in Ontario, Canada, was  acquired by Sibanye in May 2017.

Rand hedges closed lower as the rand looked set for its second day of gains against the dollar. British American Tobacco fell 2.3% to R499.17, AB InBev 1.02% to R1,259.15, and Richemont 0.42% to R119.50. 

MTN gave up 0.82% to R121.11. The telecoms company’s case regarding a $2bn tax dispute with Nigeria’s attorney-general was adjourned on Wednesday until October 29, Reuters reported.

Exxaro fell 0.28% to R178 after its financial director Riaan Koppeschaar said total coal production volumes are expected to decrease by 5% in the six months to end-June. 

Cement maker PPC appointed Roland van Wijnen as its next CEO. The company postponed the release of its annual results just 20 minutes before the presentation was due on Wednesday, citing considerations relating to fair-value adjustments of its Zimbabwe financial assets. Its shares gained 1.05% to R4.80.

Sephaku slumped 4.15% to R1.85 after the cement maker said it estimates it will pay R35m-R40m a year in carbon taxes. 

Steinhoff climbed 3.25% to R1.27 following reports that the retailer had filed court papers to claim R870m from former CEO Markus Jooste, as well as R272m from former CFO Ben la Grange. 

Statistics SA is scheduled to release the producer price index (PPI) figures for May on Thursday. Trading Economics expects inflation at the factory gate to have slowed to 6.3% year-on-year from April’s 6.5%.

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