Rand strength forces JSE lower across the board

THE JSE closed weaker yesterday as a stronger rand dragged down miners, while global markets failed to provide meaningful direction.

Market focus was on US Federal Reserve chairwoman Janet Yellen’s speech at the US Senate Banking Committee.

Late last night, she said the Fed would likely need to raise interest rates at an upcoming meeting.

She said delaying rate hikes could force the central bank to raise rates faster down the line, which could risk a recession. She said the central bank’s expectation was that the job market would tighten further and that inflation would rise to 2%.

Yellen also expressed uncertainty over economic policy under a President Donald Trump administration.

The JSE all-share closed 0.93% lower at 52 465.6 points and the blue chip Top 40 dropped 1.1%.

Platinum stocks lost 3.4%, industrials 1.41%, resources 1% and food and drug retailers 0.73%. Banks rose 0.86% and financials 0.26%.

The JSE was boosted by domestic data, with the unemployment rate in the fourth quarter of last year improving to 26.5% from 27.1% in the third.

Higher commodity prices supported sentiment in day trade, though the gold and the platinum price slipped.

Global miner Anglo American dropped 1.71% to R228.92 and Glencore 2.06% to R53.77.

Kumba Iron Ore slumped 7.16% to R209.35 and ArcelorMittal fell 3.17% to R13.75.

Rand hedge British American Tobacco was 2.48% lower at R814 and Anheuser-Busch InBev declined 0.42% to R1 414.

Northam Platinum shed 5.88% to R51.06 and Impala 2.97% to R52.89.

FirstRand and Nedbank did best of the big four banks, with the former adding 1.28% to R52.23 and the latter 1.63% to R243.96.

Santam lifted 1.69% to R241.01, after expectations that full-year headline earnings a share will drop 44% to 49%.

The rand firmed to an 18-month high of R13.07 to the US dollar in early trade, but relinquished some gains later as the dollar staged a turnaround.

Futures dipped in line with the weaker JSE.

The near-dated Top 40 Alsi futures index was 1.27% lower at 45 554 points with 26 989 contracts traded from Monday’s 23 778.