MARKET WRAP: JSE slips 1% despite rand support

The JSE weakened on Thursday, with a firmer rand weighing on miners, while banks and retailers managed a relatively strong performance.

The rand was firmer despite a weaker euro, with the common currency under pressure as Italian politicians battle to put a budget together.

The dollar found support, putting pressure on local miners. A 3% fall by Naspers ensured the local bourse closed lower.

The all share fell 1.03% to 55,988.6 points and the top 40 1.11%. General retailers gained 1.46%, food and drug retailers 1.01%, and banks 0.7%. Gold miners slumped 4.71% and industrials 1.49%

Local data on the day was downbeat, with producer inflation printing higher than expected, at 6.3% year-on-year in August. The economic consensus was for inflation to have moderated slightly to 5.9% from 6.1% in July, with this news coming ahead of the announcement of what could be a fuel-price increase of R1 a litre next week.

This comes as the Reserve Bank’s tone has turned hawkish. While second-round inflationary effects haven’t come through markedly at the consumer level as yet, the impact of rand depreciation and higher commodity prices is being felt, said Investec economist Lara Hodes.

Global markets were higher, bolstered by the US Federal Reserve statement on Wednesday. Analysts said the central bank’s bullish assessment of the US economy was beneficial for risk assets.

Diversified miner Glencore fell 3.42% to R61.25 and Anglo American 2.31% to R317.26.

Rand hedge AB InBev fell 2.92% to R1,241.61 and Richemont 1.78% to R115.23.

Sibanye-Stillwater fell 3.8% to R8.36 with its two biggest unions having been given permission to strike due to a failure to agree on wage increases. Harmony, which is also facing possible strike action, slumped 8.46% to R23.58. Kumba Iron Ore rose 5.42% to R312.79.

Mr Price gained 3.77% to R234.99.

Steinhoff International lost 4.38% to R2.40, despite reports that  its Asia-Pacific division has successfully refinanced some of its debt.

Long4Life fell 2.48% to R4.72, despite saying it expected headline earnings per share (HEPS) to be between 42% and 61% higher than the previous comparative period.

Naspers slumped 3.22% to R3,079.14, tracking losses in Hong Kong listed associate Tencent.

Netcare plunged 9.42% to R25, after earlier warning that tough trading conditions were weighing on its performance, particularly in SA.

Shortly after the JSE closed, the Dow was up 0.38% to 26,487.25 points, while in Europe, the FTSE 100 had gained 0.38%, the CAC  40 0.54% and the DAX 30 0.46%.

At the same time, platinum had lost 1.79% to $807.12 an ounce and gold 1% to $1,182.34. Brent crude was 0.27% lower at $81.41 a barrel.