JSE down after run as rand firms

The JSE closed weaker on Thursday — its first day of losses in 10 sessions, during which it reached six record highs — as industrials and miners pulled back on the firmer rand.

Local data were upbeat. Mining production increased by a significant 6.9% year on year in August‚ after increasing 0.9% year on year in July.

Analysts had expected a contraction‚ but this was mainly from a high base in August 2016. The release has raised expectations for SA’s economic performance in the third quarter.

Retailers, banks, financials and property stocks gained on the day after the rand strengthened 0.40% to the dollar to R13.4535, its best level so far in October.

Minutes released by the US federal open market committee were interpreted by markets as being rather dovish, after some policy makers expressed reservations about the outlook for inflation.

Analysts said this might signal a rate increase in December, but also called into question three pencilled in by the US Federal Reserve for 2018.

Mixed European markets and a soft opening on the Dow added to the subdued sentiment on the JSE, with volumes hitting R15bn by the close, lower than the daily average of R20bn.

The all share closed 0.04% lower at 57,747.30 points and the blue-chip top 40, 0.17%. Platinums lost 1.46%, the gold index 1.16%, resources 0.73% and industrials 0.15%.

General retailers added 1.36%, food and drug retailers 1.05%, banks 0.94%, financials 0.80% and property 0.42%.

Investors on the day appeared ready to begin lightening their exposure to a few counters that had enjoyed a decent run in the past nine trading days.

Aspen Pharmacare was the best performer among blue-chip companies, adding 4% to R319.19.

Rand hedge British American Tobacco dropped 1.4%, to R864.32 and Richemont 1.08%, to R123.74.

Gold Fields lost 2.88%, to R54.36 and Anglo-Gold Ashanti 1.17%, to R125.66. Trading ex-dividend Harmony added 0.69%, to R24.83.

The rand held steady at firmer levels in late trade, last seen at R13.4737 to the dollar. Bonds struggled to hold on to firmer levels despite the recovery in the rand. The benchmark R186 was last bid at an unchanged 8.68%.