MARKET WRAP: JSE lower as markets navigate Turkey’s straits

The JSE was lower on Tuesday due to a stronger rand, as markets continue to digest the implications of Turkey’s financial crisis.

Banks were firmly higher on the day, more than recovering losses sustained on Monday. Miners fell sharply, however, under pressure from a firmer rand and gloomy Chinese data — this despite upbeat local stats on the sector.

The all share lost 0.48% to 57,608.9 points and the top 40 0.52%. Gold miners slumped 6.04%, platinums 2.2% and industrials 0.62%. Banks gained 1.98% and general retailers 1.84%.

The rand firmed more than 2% as the Turkish lira showed signs of stabilising, although concerns over that country’s debt exposure and its conflict with the US over the detention of an American citizen remain unresolved.

Local data was supportive, with the mining sector recording growth for the first time in three months. Production rose 2.8% year on year in June, while the contraction of 2.6% year on year originally reported in May was revised to just 1.8%.

Mining production has dropped 1.5% this year compared to 2017. “Commodity prices have suffered of late amid geopolitical concerns and rising trade tensions that have reinforced investor concerns over global growth, threatening demand,” said Investec chief economist Annabel Bishop. Other factors, including declining productivity and escalating costs, have also suppressed activity in the mining sector, she said.

Earlier, Chinese data was less supportive, with business activity showing investment slowed to a two-decade low in July, reported Dow Jones Newswires.

Diversified miner Anglo American lost 2.95% to R298.44 and Glencore 2.15% to R57.24.

Gold Fields plummeted 13.82% to R41.84, after saying earlier it was preparing to lay off up to 1,560 people at its loss-making South Deep mine.

Capital & Regional fell 7% to R8.10, after earlier declaring an interim dividend of 1.82 UK pence per share for the half year to end-June, a 5.2% increase.

Curro gained 0.7% to R31.45, after saying earlier that revenue in the six months to end-June grew 18% to R1.2bn.

Naspers fell 2.06% to R3,335.

At 5.30pm, the Dow had gained 0.52% to 25,319.39 points, while in Europe, the FTSE 100 had lost 0.22%, and the CAC 40 0.16%. The DAX 30 was flat.

At the same time, gold had risen 0.26% to $1,196.83 an ounce while platinum was little changed at $804.16. Brent crude was down 0.25% to $72.59 a barrel.

The top 40 Alsi futures index fell 0.46% to 51,500 points. The number of contracts traded was 22,882 from Monday’s 18,368.

Source: businesslive.co.za