China downgrade hits the markets

The JSE closed weaker on Wednesday amid generally negative emergingmarket sentiment following ratings agency Moody’s decision to downgrade China’s sovereign credit rating.

The decision pushed commodity prices lower, causing a knock-on effect to mining stocks, which was worsened by a stronger rand. At 6.34pm, the rand was at R12.94 to the dollar from Tuesday’s R13.07. The R186 bond was bid at 8.49%, from 8.56%.

The rand firmed after SA’s consumer inflation beat forecasts, coming in at 5.3% year on year in April.

The all share closed 0.44% lower at 54,308.70 points and the blue-chip top 40 dropped 0.47%. Platinums lost 3.97%, the gold index 3.49%, resources 0.93% and industrials 0.71%. Banks gained 1.97% and financials 0.70%. Property added 0.18%.

Sibanye Gold plummeted 34.22%, to R18.59 on technical issues in a rights issue to fund its Stillwater takeover.

Anglo American ended the day 0.96% lower at R181.73 and Kumba Iron Ore lost 3.06%, to R159.09.

Impala Platinum was 5.35% lower at R41.56, while Lonmin lost 6.09%, to R14.65.

Banks gained on the inflation numbers and the rand, with Standard Bank adding 2.47%, to R154.34 and Barclays Africa 2.45%, to R149.98.

Transaction Capital dropped 3.37% to R14.35 as the group reported a drop in annual core headline earnings.

Tsogo Sun’s share price fell 1.02% at R24.30, despite 8% higher earnings, however it rose for the year to March,

Mediclinic tumbled 7.28% to R137 after reporting underlying full-year earnings before interest, tax, depreciation and amortisation up 17%.

Retailer Lewis rose 2.70% to R33.10, despite reporting a decline in headline earnings for the year to March.

Global beer giant Anheuser-Busch InBev was 1.52% lower at R1,526.32 while British American Tobacco relinquished 1.12%, to R912.25.

Futures came under pressure as commodity prices fell, with the neardated top-40 Alsi futures index down 0.76% to 47‚925 points, as 20,028 contracts traded from Tuesday’s 20‚882.