JSE slides on risk-off sentiment

The JSE closed weaker on Thursday as rand hedges, led by British American Tobacco (BAT), pulled the market down following a positive opening.

BAT plummeted 6.85% to R618.99 on reports of lower cigarette sales at US rival Philip Morris. BAT’s share price is down 25% so far in 2018.

A firmer rand supported banks and retailers at the opening, but renewed risk-off sentiment reversed the gains towards the close.

Platinum shares were the best performers on the day, followed by property stocks. Shares in the Resilient stable rose sharply after being hammered over the past few months.

The platinum price reversed earlier gains to lose 0.26% to $939.37/oz in late trade. The gold price shed 0.43% to $1,343.30/oz.

The Dow was 0.25% lower at the JSE’s close. Trade in US markets has been upbeat this week, as US corporate earnings were mostly positive.

“With a lack of geopolitical drivers, markets have entered a somewhat quietened period of trading,” Hantec Markets analyst Richard Perry said.

The all share closed 0.32% lower at 57,526.80 points and the top 40 lost 0.58%. Industrials dropped 0.73%, general retailers 0.44% and banks 0.26%. The platinum index gained 2.24%, property 1.64%, gold 1.16% and food and drug retailers 1.11%. Naspers fell 0.34% to R3,037. Resilient jumped 7.37% to R68.50 and Nepi Rockcastle 3.59% to R139.

Pioneer Foods slumped 6.65% to R118.55 despite reporting improved prospects for its interim reporting period. Clicks gained 2.48% to R200.50 after informing the market it intended opening another 40 stores.

After earlier firming to R11.9171/$ the rand lost some momentum in later trade on a subdued euro. The rand was at R11.9524/$ at the JSE’s close.

Analysts said global economic fundamentals were, once again, in the driving seat as opposed to risk from geopolitical events.

Local bonds were positive with the R186 breaking below 8%, reaching 7.985% in intraday trade, its best level in three weeks. US and UK bond yields rose sharply as a bout of risk-on sentiment supported equities.

The top 40 Alsi futures index lost 0.46% to 51,310 points. The number of contracts traded was 24,085 from Wednesday’s 15,278.