JSE slips after dip in retailers, property stock

THE JSE closed weaker yesterday, with industrials retreating on a firmer rand and general retailers giving back earlier gains on reduced expectations of lower interest rates.

Interest-rate-sensitive property stocks ended in the red‚ while gold shares softened on a marginally firmer dollar. Rand hedges edged lower as the rand firmed. Commodity prices were also down‚ with resources losing ground at the close on the stronger rand.

Retailers felt added pressure after the earlier release of Pick n Pay’s annual results. Despite reporting after-tax profit growth of 17% to R1.2-billion‚ the market was spooked by the retailer reporting lower revenue growth of 7% to R79-billion. Most major retailers ended the day lower. The JSE all-share closed 0.24% lower at 52 545.1 points and the blue-chip Top 40 dropped 0.22%.

Gold gave up 2.34%‚ property 1.23%‚ general retailers 1.1%‚ resources 0.36% and industrials 0.35%.

Positive consumer inflation data – a slowdown to 6.1% last month from 6.3% in February – rekindled views that the Reserve Bank could have another look at interest rates‚ with some analysts hoping for a drop towards year-end.

However‚ that seemed unlikely‚ as rand risks remained on the upside, Momentum Investments analyst Sanisha Packirisamy said.

The downgrades to junk status by two ratings agencies‚ and ongoing political noise‚ had raised the risk of higher inflation and lower growth, she said.

Investec economist Kamilla Kaplan said consumer inflation could return to within the Reserve Bank’s 3% to 6% target from the second quarter, and that this would likely see the central bank retain a cautious policy stance.

Anglo American was 0.87% higher at R191.46‚ while Kumba Iron Ore recovered 4.75% to R178.12. ArcelorMittal shed 4.47% to R8.13. British American Tobacco lost 1.43% to R882.75. Sibanye was 6.33% lower at R31.20 after saying it intends to raise $2-billion (R27-billion) to finance its Stillwater acquisition in the US.

Aspen recovered 1.22% to R271.77 after falling more than 4% on Tuesday.