Miners drag JSE lower while volumes begin to pick up

The JSE closed weaker on Tuesday as miners fell on a stronger rand, but banking, retailer and property stocks closed firmer. The market appears to be looking for an uptick in sentiment following recent volatility in emerging markets amid the turmoil in Turkey.

Trading was cautious; however, volumes are beginning to pick up after having been subdued for the past few months. Turnover on the day exceeded R19bn, some way above the recent average of about R12bn, as the holiday season in the northern hemisphere nears its end.

“This factor could have exacerbated the extent of the market’s reaction to the Turkish crisis as thinner trading volumes can heighten volatility,” Franklin Templeton analysts said.

The rand firmed to R14.02 to the dollar in intraday trade, but had weakened to R14.1674 by the JSE’s close.

Naspers pared some of the losses it suffered from weaker Asian markets, but rand hedges ended the day mixed, with AB InBev up and British American Tobacco flat.

Market participants focused on signs that Turkey was trying to stem further weakness in its currency that has slashed a third of its value over the past two weeks alone. On Monday, Turkey’s central bank pledged to provide “all the liquidity” the country’s financial institutions needed.

Dow Jones Newswires reported that it was unclear if the measures by the Turkish government would be enough to address many of the economic challenges that Ankara faced under President Recep Tayyip Erdogan.

Erdogan has refused to lift interest rates, as recommended by experts, and so threatening the independence of the central bank. He has also crossed swords with US President Donald Trump over the detention of evangelical US pastor Andrew Brunson.

Mining stocks retreated on the firmer currency, despite upbeat growth data from the sector in June. Statistics SA said earlier annual mining production growth quickened to 2.8% in June from a 1.8% decline in May. The rise was mainly the result of an increase in the production of platinum group metals, up 28.2%, with the weaker rand during the course of the month boosting the sector overall.

Brent crude rose 1% to $73.45 a barrel.

The all share closed 0.48% lower at 57,608.90 points and the top 40 dropped 0.52%. The gold index tumbled 6.04%, platinums 2.2%, resources 1.45% and industrials 0.62%. Banks lifted 1.98%, general retailers 1.84%, property 1.1% and financials 0.85%.

Anglo American fell 2.95% to R298.44 and Sasol 1.6% to R523.60.

AB InBev rose 0.58% to R1,388 but British American Tobacco lost 0.16% to R754.61.

Gold Fields plummeted 13.82% to R41.84 and Sibanye-Stillwater 5.08% to R8.22.

Lonmin slumped 6.01% to R7.20.

FirstRand jumped 3.57% to R65.30.

Among property stocks Hyprop recovered 1.72% to R101.50.

Naspers ended the day 2.06% lower at R3,335.

Curro Holdings rose 0.7% to R31.45. On Tuesday, the education group reported overall revenue growth of 18% to R1.2bn in the six months to end-June.