Spiking bond yields pinch JSE
The JSE closed lower on Thursday, but off its worst levels, as global bond yields pushed higher on a booming US economy.
Better-than-expected US jobs numbers and an upbeat assessment of the economy by Federal Reserve chair Jerome Powell have pushed global bond yields higher.
The rand weakened as a result, with large diversified miners benefiting, further bolstered by a continued climb in the price of Brent crude, which hovered around $86 a barrel.
The all share fell 0.26% to 55,030.6 points, and the top 40 0.11%. Industrials fell 1.1%, food and drug retailers 2.63% and retailers 0.51%. Resources gained 1.68% and gold miners 1.03%.
US private sector employers added 230,000 jobs in September, well ahead of market expectations of a 185,000 increase. US nonfarm payrolls data is due on Friday.
The JPMorgan global bond yield was rising towards 2.7%, which is the “Rubicon level” for global financial markets, said Nedbank Corporate and Investment Banking analyst Mehul Daya and Neels Heyneke.
“Prospects for global growth and risk assets are likely to be dented over the next six to 12 months, as the rising cost of capital globally will likely weigh on the global economy’s ability to generate liquidity.”
The Dow opened lower, looking set to snap a five-day winning streak as investors kept an eye on bond yields, reported Dow Jones Newswires.
Diversified miner BHP rose 3.51% to R326.73, Glencore 3.42% to R64.32 and Anglo American 2.24% to end the day at R334.30.
Rand hedge AB InBev gained 0.86% to R1,279.37, while British American Tobacco, trading ex-dividend, fell 0.34% to R657.86.
Clicks dropped 4.32% to R165.03, Pick n Pay 3.84% to R66.54 and Spar 2.79% to R174.28.
Tiger Brands slipped 3.36% to R249.11. MTN fell 2.51% to R87.30. Naspers slipped 1.55% to R2,924.
Pioneer Food Group slumped 10.65% to R81.13, despite saying earlier that it expected headline earnings per share to be at least 24% higher in the year to end-September, with its recent acquisitions helping to boost revenue and volume growth.
Argent Industrial fell 2.2% to R4, after saying earlier that it expected headline earnings per share to grow by between 36.9% and 56.9% in the six months to end-September, when compared to the prior comparative period.
Shortly after the JSE closed, the Dow was off 0.76% to 26,625.16 points, while in Europe, the FTSE 100 had fallen 1.22%, the CAC 40 1.46% and the DAX 30 0.22%.
At the same time, platinum was up 0.6% to $828.50 an ounce and gold 0.56% to $1,203.88.
Brent crude was 0.28% lower at $85.69 a barrel.