Bourse weakens as US bonds fall

The JSE all share closed weaker on Tuesday as renewed risk-off trade returned to the market amid a weaker US bond market, which caused the dollar to firm.

The local market was also on tenterhooks before the budget on Wednesday, which analysts have cautioned could temper the momentum created by Cyril Ramaphosa’s rise to the presidency.

The Dow was 0.45% weaker at the JSE’s close. The FTSE 100 was lower, but European markets picked up the pace on the softer euro.

Losses on the JSE were broadbased, led by retailers and miners. Rand hedges were mixed on the weaker rand, with Naspers down 3% at one stage before recovering towards the close. British American Tobacco ended the day higher.

Property stocks remained under pressure, despite upbeat annual results from Nepi Rockcastle, released on Tuesday.

The all share closed 1.32% lower and the top 40 dropped 1.35%. The gold index dropped 3.44%, general retailers 2.02%, resources 2.01%, food and drug retailers 1.78%, industrials 1.42% and banks 1.26%.

Nedbank slipped 2.56% to R285.50 and Barclays Africa 2.27% to R198.

Discovery rose 3.13% to R182.07 after reporting earlier that its aftertax profit grew 30% to R2.7bn in the six months to end-December compared to the prior period.

The rand was at R11.730 to the dollar at the close from R11.6722. The rand’s moves were in sync with other emerging market currencies.

The euro was at $1.2350 from $1.2407, reflecting the strength of the dollar after earlier weakening to $1.25.

The dollar steadied as investors become cautious ahead of the release of the US Federal Reserve minutes for the January meeting, analysts said. The dollar’s relative strength came as US government bond yields climbed again, with the yield on the benchmark treasury paper touching its highest level in four years, at 2.90%.

Local bonds were marginally weaker, with the R186 bid at 8.105% from 8.080%. The US 10-year treasury was at 2.8941% from 2.8777%.

The top 40 Alsi futures index lost 1.25% to 51‚075 points. The number of contracts traded was 24,276 from Monday’s 12‚909.