Banks and retailers feel the heat

The JSE started the week on a negative note on Monday as the all share lost ground amid softer global markets spooked by the possibility of a more aggressive tightening of monetary policy by the US Federal Reserve.

Banks, retailers and property stocks were hard hit on the day in risk-off trade. Platinums shed more than 5%, even though the metal price was up 0.74% to $995.50 an ounce at the close.

The Dow opened 0.83% weaker after Friday’s sharp drop that sent the global benchmark down more than 650 points for its worst week since early 2016.

European markets were lower, with the FTSE 100 losing 1.17% and the DAX 30 losing 0.81%. The all share closed 2.63% lower at 57,113.70 and the top 40 lost 2.72%.

The platinum index dropped 5.54%, banks 3.15%, property 3.13%, industrials 2.94%, financials 2.68%, food and drug retailers and the gold index both 2.34%, and resources 1.64%.

Rand hedge British American Tobacco slumped 3.11% to R787 and Anheuser-Busch InBev 2.53% to R1,316.56. Anglo American Platinum plummeted 6.82% to R330.98.

Capitec fell 6.45% to R864.66, Standard Bank 3.96% to R195.09 and Nedbank 3.11% to R255.79.

Resilient slumped 6.35% to R100.21 and Fortress B 6.4% to R23.40.

The rand was range-bound around R12 to the dollar for most of the day as the currency market awaited developments around President Jacob Zuma.

The ANC’s national working committee is set to discuss Zuma’s refusal to step down as president following a meeting with the party’s top six leaders on Sunday.

The rand traded between R11.98 and R12.08 and was at R12.0473 soon after the JSE’s close.

Local bonds were marginally firmer after trending weaker following the earlier sharp spike in US yields on robust jobs data released in that country on Friday.

The R186 was bid at 8.485%, from 8.475% and the R207 was at 7.05%, from 7.06%.

The US 10-year bond was last seen at 2.8521% from 2.8405%, with analysts reckoning the yield could reach 3% to 3.25% over the short term, still off the average yield of 5% in previous upward cycles in the bond market.