All share hit hardest in four weeks

The JSE tracked weaker global markets on Tuesday, as surging commodity prices raised concern about inflation. Miners and tech-heavy Naspers and Prosus led JSE losses with the all share falling the most in four weeks.

The global tech sell-off that began on Monday in the US continued on Tuesday with the tech-heavy Nasdaq falling almost 2% in afternoon trade as traders fretted about inflation.

“Inflation concerns sent tech stocks tumbling, and the sector has come under pressure [on Tuesday],” said Oanda market analyst Sophie Griffiths.

Bocom International research head Hong Hao told Reuters that inflation fear sent investors from growth stocks “to pick cyclicals amid the momentum of the economic recovery”. Naspers fell 1.83% to R3,174.59 and Prosus 3.30% to R1,428.56. Griffiths said: “Commodity prices have surged recently amid reopening optimism and infrastructure spending expectations. While the US Federal Reserve is insisting that rising inflation is transitory, the surge in commodity prices is making investors question the Fed’s stance.

“With China and the US, the world’s two largest economies, showing signs of rising inflationary pressures, investors are getting nervous.

“The overriding fear is that pandemic stimulus combined with reopening economies will spark a sharp drive higher in inflation, forcing central banks to take action, tightening policy and potentially slowing down economic recovery,” she said.

The JSE all share fell 1.73% to 67,197.23 points and the top 40 1.80%. Precious metals dropped 2.56%, industrial metals 1.93%, resources 2.06%, listed property 2.16%, industrials 1.75%, banks 0.38% and financials 0.56%.

Harmony Gold led the losses in the precious metals sector, falling the most in more than four months, down 5.38% to R68. Sibanye-Stillwater relinquished 3.93% to R64.72, Northam Platinum fell 2.80% to R241.30, Gold Fields 2.32% to R146.98, Impala Platinum 2.30% to R261.33, DRD Gold 2.08% to R14.62, AngloGold Ashanti 2% to R312.92 and Royal Bafokeng Platinum 1.83% to R108.

At 5.20pm, the Dow Jones Industrial Average was 1.47% weaker at 34,232.14 points. In Europe, the FTSE 100 had lost 2.76%, France’s CAC 40 2.27% and Germany’s DAX 30 2.22%.

At 5.08pm, the rand was little changed at R14.0125/$ and R17.0333/€, while it had weakened 0.15% to R19.8101/£. The euro was 0.22% firmer at $1.2155.