Global risk-off sentiment hits JSE

Global risk-off sentiment saw all of the JSE’s major indices fall on Wednesday, with global diversified miners facing multiple headwinds.

The day began inauspiciously with the release of weak data out of China and Japan ensuring Asian bourses there ended the day lower. Sentiment was dampened by a possible amendment to the South African Constitution to allow for the expropriation of land without compensation‚ and a further downgrading of Eskom’s debt by S&P Global Ratings earlier in the day.

Industrial production in Japan in January saw a decline of 6.6%, the sharpest since 2011, which was marked by a devastating earthquake and tsunami, said FX Pro analysts. “Yet, investors were even more concerned about the drop in China’s PMI indices, with the manufacturing PMI falling from 51.3 points to 50.3”. Markets were also digesting commentary from US Federal Reserve chairman Jerome Powell, widely perceived as hawkish. This, along with the stronger dollar, helped take the shine off local miners.

The all share closed 1.19% lower at 58‚325.10 points and the top 40 dropped 1.25%. General retailers fell 2.45%‚ property 2.02%‚ banks 2.01%‚ financials 1.39%‚ the gold index 1.38% and industrials 1.2%.

Anglo American dropped 2.87% to R292.50 and BHP 1.63% to R244.88. Exxaro plummeted 10.13% to R132.42‚ partly due to its trading ex-dividend. British American Tobacco closed 2.21% lower at R706.75. AngloGold Ashanti slipped 2.55% to R108.18. Nedbank lost 3.62% to R287.56‚ FirstRand 2.31% to R73.90 and Barclays Africa 1.73% to R198.50. MMI relinquished 2.06% to R21.83. Growthpoint closed 0.61% lower at R29.50 despite increasing its distribution per share for the six months to end-December 2017 by 6.5%. Resilient slumped 7.31% to R66.36 and Nepi Rockcastle 5% to R119.23. Naspers fell 1.23% to R3‚271.

At 5.40pm the Dow was up 0.55%‚ while European markets had reversed course from earlier losses. The FTSE 100 was up 0.1%‚ the DAX 30 0.17% and the CAC 40 0.21%.

Gold was flat at $1‚318.94 an ounce Platinum was off 0.11% to $981.71. Brent crude fell 0.98% to $65.89.

The top-40 Alsi futures index fell 1.08% to 51‚405 points. The number of contracts traded was 20‚306 from Tuesday’s 16‚841.