JSE weaker as strong US data points to hike in its interest rates

THE JSE closed weaker as banking and retail shares retreated yesterday in risk-off trade, while higher gold and platinum prices supported miners toward the close.

Volumes on the bourse are beginning to pick up, with the value of shares traded amounting to R10.7-billion by the close.

Sentiment was negative on US Federal Reserve minutes indicating that at least three US interest rate increases could be possible this year.

Expectation of slightly higher US growth this year would also support higher interest rates.

However‚ the minutes also indicated a wait-and-see attitude on how US president-elect Donald Trump’s fiscal policy would play out.

“Any real shift in the stance of monetary policy would require more clarity on the Trump stance on fiscal policy‚” Barclays Research analysts said.

Political issues are likely to cast a shadow over the JSE this year.

Nomura analyst Peter Attard Montalto said the key investor question was what the main drivers of growth in South Africa would be.

“We think the answer is likely to be a very loud, not much at all.”

The JSE all-share closed 0.56% lower at 50 475 points and the blue-chip Top 40 0.64%. Banks were down 2.24%‚ general retailers 2.05%‚ financials 1.4% and industrials 0.73%.

Platinums jumped 4.05%, the gold index 3.7% and resources 0.72%.

Harmony led gold shares higher‚ gaining 4.59% to R33.02‚ Sibanye added 3.94% to R27.14 and Anglo Gold Ashanti 3.66% to R159.

Impala Platinum was 4.41% higher at R47.08 and Lonmin jumped 8.69% at R29.90.