JSE marginally down despite Anglo soar

The JSE closed marginally weaker on Thursday, with global peers mixed as investors digested data showing the US economy slowed below estimates.

Anglo-American led the gainers on the local bourse on the day, jumping 18.92% to R611 after BHP Group confirmed on Thursday that it had proposed a potential combination to its London-listed rival, by way of an arrangement valuing its rival miner at £31.1bn.

BHP’s proposal comprises an allshare offer for Anglo subject to the pro-rata distribution by Anglo of its entire shareholdings in Anglo American Platinum and Kumba Iron Ore to Anglo shareholders before completion.

Anglo said earlier it had received an unsolicited, non-binding and highly conditional combination proposal from BHP, which it was now reviewing. Shares in BHP were down 2.74% to R550.

US GDP expanded 1.6% in the first quarter, well below the forecast growth of 2.4%.

The report raised investor concern about persistent inflation and whether the Federal Reserve would be able to deliver an interest rate cut any time soon, Bloomberg reported.

After the GDP print, traders moved down expectations for an easing of the Fed’s monetary policy.

Traders now forecast just one interest rate cut this year, according to the CME FedWatch Tool.

Investors are now looking out for the Fed’s preferred measure of inflation, the personal consumption expenditure (PCE) index for March due on Friday. Economists polled by Bloomberg are expecting a monthly increase of 0.3% and a jump of 2.6% from a year earlier.

“Rate cut uncertainty remains, keeping markets on edge as traders look at the upcoming data, which is likely to shape the path of Fed policy,” TreasuryONE currency strategist Andre Cilliers said.

The JSE all share lost 0.25% to 74,329 points and the top 40 0.2%.

At 5.20pm, the Dow Jones industrial average was 1.54% weaker at 37,869 points and the S&P 500 1.27%. In Europe, the FTSE 100 gained 0.44%, while France’s CAC 40 lost 0.86% and Germany’s DAX 0.89%.

At 5.25pm, the rand had weakened 0.82% to R19.0426/$, 0.62% to R20.4052/€ and 0.58% to R23.7806/£. The euro was 0.17% firmer at $1.0717.

Gold gained 0.76% to $2,333.50/oz and platinum 0.88% to $920.30/oz. Brent crude was 0.43% weaker at $87.49 a barrel.