MARKET WRAP: JSE closes lower but rand gains further on Powell testimony

The JSE closed lower on Thursday, while the Dow pushed to a record high after US Federal Reserve chair Jerome Powell’s testimony escalated expectations that the central bank may soon ease monetary policy.

At the close of the JSE, the Dow had gained 0.68% to 27,041.96 points. US markets pushed higher as investors continue to bet on a rate cut at the Fed’s next meeting in July. Markets have now pretty much fully priced in the chance of a 25-basis-point cut. Powell noted developments in the US-China trade war, concern over global growth and weak inflation as factors that may affect US monetary policy.

In Europe, the FTSE 100 had fallen 0.25%, France’s CAC 40 0.31% and Germany’s DAX 30 0.45%. Earlier, in Asia, the Shanghai Composite was little changed, while Hong Kong’s Hang Seng gained 0.81% and Japan’s Nikkei 0.51%. 

Powell’s dovish tone pushed the rand to below R14/$, to its best level in five months on Thursday, at R13.8573/$. Shortly after the JSE closed, however, the rand had strengthened 0.41% to R13.9274/$ and 0.33% to R15.6831/€, while it was flat at R17.4756/£. The euro was little changed at  $1,1261.

The benchmark government 10-year bond was stronger, with its yield falling eight basis points to 8.025%. Bonds yields move inversely to bond prices. It earlier broke below 8% for the first time since April 2018.

Gold had fallen 0.5% to $1,1411.70/oz and platinum 0.12% to $825.80. Brent crude was 0.5% higher at $66.98 a barrel. 

The JSE all share fell 0.56% to 57,273.10 points and the top 40 0.59%. Gold miners lost 1.67% and resources 1.54%, while general retailers gained 2.61%.

Gold Fields dropped 3.43% to R74.41, Harmony 1.98% to R33.15, AngloGold Ashanti 0.86% to R253.59 and Sibanye-Stillwater 0.65% to R16.70. 

Sasol fell 3.29% to R325.34.

EOH dropped 8.4% to R22.24.

Cell C’s largest investor, Blue label Telecoms, slumped 9.74% to R3.52 — its worst level in 11 years — after the former asked  law firm Bowmans to investigate some of its business units, which may be involved in “irregular” practices.

Among retailers, Mr Price gained 2.01% to R197, Truworths 1.94% to R67.70 and TFG 1.56% to R183.06.

Sygnia fell 0.11% to R9.39. The financial services company said earlier that global firm Mazars would become its auditor with immediate effect.