South African stocks halted a three day gaining streak, falling 1.1% by 10:25 a.m. in Johannesburg and paring the benchmark equity index’s strongest first-quarter performance since 2006. Local heavyweights Naspers and Richemont joined banks as well as gold and iron-ore producers to drag the market lower on a risk-off day.
More than 110 of the main index’s 140 constituents retreated in morning trade, while only 24 advanced.
South African stocks tracked peers in Asia, which fell Wednesday amid upward pressure on bond yields as investors await more details on the next leg of US stimulus spending, with investors watching the course of the growth rebound and its possible impact on inflation. The International Monetary Fund will upgrade its forecast for global economic growth next week.
Wednesday’s weakness trimmed the year-to-date advance in the benchmark index to 12%, still on track for a fifth consecutive month of gains in March, the longest such winning streak since April 2019. The FTSE/JSE Africa All Share Index is on course for the best quarterly performance since June, and the biggest gain for the first three months of the year since 2006.
On the local pandemic front, President Cyril Ramaphosa on Tuesday evening announced a four-day ban on alcohol sales limited to the holiday weekend starting Friday and only applying to off-site sales. Restaurants, bars and similar establishments may still serve customers.
“We do not anticipate that the restrictions on the sale of alcohol for off-site consumption will have a negative impact on the economy, given that the measures will only remain in place over the long weekend and are likely to lead to pre-stocking,” said Mpho Molopyane, an economist at FirstRand Group Ltd.’s Rand Merchant Bank.
Distell, a wine and spirits maker, fell as much as 1.7% before paring the decline to 0.2%.
Luxury retailer Richemont dropped 2.2%, causing the biggest drag on the market. Naspers retreated for a second day, down 0.5%, while its subsidiary Prosus NV dropped 0.5%.
An index of bank stocks fell for the first day in three, dropping 1.2% in the biggest intraday decline in a week, as risk-off equity sentiment countered rand strength.
- FirstRand -1%, Standard Bank -1.5%, Capitec Bank -1.4%, Absa -1.4%, Nedbank -1%, Investec -0.7%.
Industrial metals producers fell 0.2%, tracking falling iron ore prices, as China considers a number of tax changes for its mammoth steel industry to bolster efforts to clean up one of the dirtiest industries in the world’s top carbon emitter.
- BHP Group -0.3%, Anglo American -0.2%, African Rainbow Minerals -0.3%, Glencore -0.1%.
Precious metals producers dropped for a third day, down 0.6% as weakness in gold prices countered rising platinum prices.
- Gold Fields-2.2%, AngloGold Ashanti -1.8%, Northam Platinum -0.6%, Anglo American Platinum -0.3%, Harmony Gold Mining Co. -1%, Sibanye Stillwater -0.1%, DRDGold -2.6%, Royal Bafokeng Platinum -0.9%.
- Foreigners were net buyers of South African equities for a second day Tuesday, purchasing R978 million ($66 million) worth of shares, according to exchange operator JSE Ltd.