JSE slips lower on likely downgrades

THE JSE closed weaker yesterday as ratings downgrade-sensitive stocks – such as banks‚ retailers and property – came under pressure ahead of expected further ratings announcements this week.

At R27-billion‚ volumes were much higher compared with earlier in the week.

Resources stocks were weaker in line with softer commodity prices, as oil tumbled.

A late recovery in the platinum price brought some relief to platinum stocks‚ but further gains were capped by a stable rand.

Rand hedges lifted‚ although Naspers tumbled 3.02%.

The market has largely priced in a one-notch downgrade from Moody’s in currency ratings from Baa2 to Baa3. The expectation is that Moody’s will change the outlook to stable – with a twonotch downgrade unlikely – but analysts say markets may be affected adversely if a negative outlook is assigned.

Futuregrowth said the market was bracing itself.

Analysts said there was also some profit-taking since the beginning of this month.

Domestic stocks were hit by jarring trade data, a R5.08-billion surplus for April‚ worse than R7.4-billion expected.

The all-share closed 1.1% lower at 53 562.6 points and the blue-chip Top 40 1.14%.

Banks dropped 3.12% and the gold index 1.68%. Financial stocks dipped 1.58%‚ property 0.98%‚ and general retailers closed 0.86% lower. Platinums added 0.33%.