Industrials and banks lead retreat

The JSE closed weaker on Thursday, as industrials and banks retreated in risk-off trade, following gold shares on a weaker Dow opening and lower European markets.

The Dow was 0.22% weaker at the JSE’s close and the Dax lost 1.64%.

Global markets were under pressure for most of the day, following sharp spikes in global bond yields and a weaker dollar as markets changed gears towards the increased likelihood of a higher interest rate environment.

US Federal Reserve chairwoman Janet Yellen reaffirmed last week its hawkish stance on further interest rate increases in 2017. It also seems increasingly likely that the European Central Bank and the Bank of England will follow suit.

After a promising start, banks and financials faded towards the close, with industrials also losing ground, led by market heavyweight Naspers closing 1.16% off at R2,549.98.

Global miners were the flavour of the day, but rand hedges were under pressure. Anglo American was lifted 2.46% to R174.75 and British American Tobacco dropped 1.61% to R886.50.

The all share ended 0.47% lower at 51,356 points and the blue-chip top 40 closed 0.64% lower. The gold index lost 3.26%, industrials 0.81% and banks 0.88%. General retailers climbed 0.53% and platinums gained 0.4%.

Among gold shares, Gold Fields lost 4.91% to R43.54, while AngloGold Ashanti fell 2.87%, to R128.44.

Kumba Iron Ore jumped 4.78%, to R168 and African Rainbow Minerals rose 4.61%, to R81.07.

Among banks, Barclays Africa was off 1.44%, at R143.50.

The rand was weaker in earlyevening trade in a choppy trading day as the local currency sought direction between a weaker dollar and upbeat producer inflation data. The producer price index came in at 4.8% year on year in May, from 4.6% in April.

Bond yields rose in line with the global trend. The R186 was bid at 8.73%, from 8.67% before.

The local near-dated top-40 Alsi futures index was down 1.15%, at 45,300 points.