Stocks slump before rates decision

South Africa’s main stock benchmark retreated for a third day Thursday, falling 1.6% by 9:35 a.m. in Johannesburg, the biggest intraday decline in two weeks. Tech investor giant Naspers led the losses after a tech selloff in the US and Asia overnight, while miners were weaker after Federal Reserve Chair Jerome Powell highlighted uncertainty about the economic rebound.

The risk-off sentiment overshadowed optimism spurred by a further easing of coronavirus restrictions in South Africa announced by President Cyril Ramaphosa on Wednesday evening.

Investor focus will be on the outcome of the South African Reserve Bank’s monetary policy committee meeting later Thursday. Nine of the 17 economists surveyed by Bloomberg expect the Sarb to cut the repo rate by 25bps to 3.25%, while eight see rates on hold.

  • Naspers retreats for a second day, down 2.4% to the lowest in more than a week as tech stocks tumble, dragging Tencent Holdings lower in Hong Kong. Naspers holds a 31% stake in Tencent.
  • Luxury retail market heavyweight Richemont falls for a third day as Bernstein says swiss watch exports still “very spiky”.
  • Falling iron ore prices drag diversified miners BHP and Anglo American lower, pulling the gauge of mining stocks down 2.5% in biggest intraday decline in two weeks.
    • BHP -2.4%, Anglo American -1.3%, AngloGold Ashanti -3%, Gold Fields -2.9%, Sibanye Stillwater -4.3%, Impala Platinum Holdings -3.7%, Anglo American Platinum -3.3%.
  • Index of bank stocks retreats as the rand falls for the first day in five.
    • FirstRand -1.2%, Standard Bank -1.3%, Absa -2.3%, Capitec -1.4%, Nedbank -1.1%, Investec -1%.
  • Woolworths -2.3% after company reports full-year earnings.
  • Foreign investors were net buyers of South African stocks Wednesday, purchasing R641 million worth of shares, according to bourse operator JSE Ltd.
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