JSE slides on GDP growth fears

THE JSE closed weaker on Friday as gold shares and miners retreated in risk-off trade after US data marginally increased the likelihood of a rate increase there next week.

The dollar strengthened in response, sending commodity prices lower with global equity markets also under pressure. The US August consumer price index (CPI) was stronger than expected across the board, rising a monthly 0.2% from a consensus 0.1%. On an annual basis CPI rose 1.1% from a consensus 1%.

Although the annual figure of 1.1% was still way off the US Federal Reserve’s 2% target, the higher inflation trend could induce the Fed to take a more favourable view toward a rate increase at its scheduled meeting on Tuesday and Wednesday.

Trade on the JSE was cautious for most of the day following renewed GDP growth concerns which could result in a rating’s downgrade after Moody’s trimmed SA’s expected GDP growth rate in 2016 to a subdued 0.2% and 1.1% for 2017.

The JSE all share closed 0.65% lower at 51,832.60 points and the bluechip top 40 fell 0.62%.

The gold and platinum indices both lost 3.12%, with food and drug retailers shedding 1.51%. The South African listed property index was 0.83% lower and financials dropped 0.64%.

Resources were off 0.72% and industrials fell 0.62%. General retailers added 0.55%.

Among individual shares on the JSE, Anglo American (AGL) lifted 1.24% to R152.78, while Sasol (SOL) was 1.1% weaker at R375.30.

Luxury goods group Richemont (CFR) was off another 1.25% at R81.23. The group earlier warned that first-half profit would decline about 45%. It has shed 27% so far in 2016.

Lewis (LEW) dropped 1.51% to R41.02. The National Consumer Tribunal earlier ordered the group to oversee an independent audit of all the credit agreements it had entered into since 2007. Brait (BAT) dropped 2.32% to R114.35.

The rand was weaker against the dollar in the wake of the higher-thanexpected US inflation number for August which boosted the dollar. At 6.01pm, the rand was at R14.2277/$ from Thursday’s R14.2311/$.

Bonds were softer in line with the rand. At 6.01pm the benchmark R186 was bid at 8.705% and asked at 8.69% from Thursday’s 8.68%.

South African futures were softer, taking their cue from a weaker Dow Jones industrial average in early trade in the US and a negative close on the JSE. At 5.58pm the local near-dated top 40 Alsi futures index was 0.61% lower at 45,993 points, with 26,494 contracts traded from 16,340 contracts traded on Thursday. With Madeleine van Niekerk