Risk aversion dominates markets

The JSE all share closed lower on Thursday after a weaker rand failed to lift miners and risk-off sentiment dominated global markets.

Risk aversion was evident after the Bank of England minutes revealed that an interest rate hike to contain inflation was possible in the coming months.

“The latest monetary policy committee meeting minutes highlight a significant shift in tone,” Barclays Research analysts said.

The pound strengthened in response as UK bond yields rose.

Resource shares were lower on generally weaker metal prices, but Sasol jumped more than 2% after Brent crude rose above $55 a barrel for the first time since April.

The all share lost 0.54%, to 55,850.30 points, with the blue-chip top 40 also down 0.54%. The platinum index shed 3.32%, resources 1.17%, banks 0.55%, industrials 0.42% and financials 0.23%. Food and drug retailers added 0.29% and property 0.09%.

BHP ended 2.35% lower at R239.56 and Anglo American shed 1.86%, to R230.89. British American Tobacco lost 1.15%, to R829.50, Brait 3.2%, to R56 and Steinhoff 1.87%, to R63.

PPC climbed 4.7%, to R6.24 after confirming that Nigeria’s Dangote Cement had tabled a bid to acquire all its shares.

Insurer MMI Holdings shed 1.65%, to R19.09. It has lost 19% so far this year. This may be a result of Alexander Forbes Risk Management removing Momentum from its panel of preferred service providers.

The rand lost more than 1.5% to the pound after the Bank of England news and traded at R17.5774 in the early evening, from Wednesday’s R17.3483.

The rand was also weaker against the dollar after US consumer inflation for August came in slightly higher than the expected 1.8% at 1.9%. The local currency was at R13.1389 to the dollar, from R13.1317 previously.

Domestic bonds were steady, with the R186 bid at 8.42%, from 8.43%.

The top 40 Alsi futures index lost 0.7%, to 49,375 points. The number of contracts traded was 23,705, from Wednesday’s 28‚241.