Stocks drift in thin trade on Fed uncertainty

SOUTH African stocks drifted sideways in thin trade yesterday, as investors remained cautious due to uncertainty over when the US Federal Reserve could start scaling back its stimulus programme.

Johannesburg-listed shares of US firm Net 1 UEPS Technologies tumbled after a court ruling that a contract with South Africa’s Social Security Agency was invalid.

“Investors are quite jumpy about what to expect from tapering talks by the Fed,” said Abri du Plessis, chief investment officer at Gryphon Asset Management in Cape Town.

“There’s quite a bit of …worry about what’s going to happen.”

The Top-40 index fell 0.29 percent to 40 169.32. The All-Share index gave up 0.18 percent to 44 975.67.

Investors are waiting to see when the US will begin scaling back, or tapering, its massive stimulus programme that has propped up emerging markets such as South Africa.

Shares of Net 1 UEPS tumbled 41 percent to R73. Standard Bank fell 1.1 percent to R120.65, as investors shrugged off news that a legal panel had overturned a $52 million court sanction against the bank. – Reuters