JSE slightly higher but banks drop

The JSE began the week amid choppy trade and low volumes on Monday, with miners and food and drug retailers faring well, while banks and property stocks came under pressure.

The rand earlier hit a three-month low to the dollar, amid market caution as investors gauged the possibility of a bear market for global bonds. The dollar has rebounded and US treasury yields have spiked on the expectation of rising inflation and accelerated monetary policy tightening in the US.

The weaker rand lifted miners, despite some commodity prices pulling back from multiyear highs.

Volumes were low on the JSE, with only R11bn traded, as opposed to the daily average of R20bn.

Much focus this week will remain on the dollar and US treasuries, with the benchmark 10-year note approaching a yield of 3%. There has been some speculation that once US treasuries reach a certain level, some investors may switch from equities to bonds. Climbing yields would also raise borrowing costs for US companies, while corporate earnings season in the US continues this week.

The all share added 0.17% to 57,679.5 points and the top 40 0.22%. Banks fell 1.64% and general retailers 1.64%. Platinums firmed 1.2% and food and drug retailers 0.9%.

FirstRand dropped 2.95% to R66.45, while Old Mutual jumped 3.88% to R42.80.

Steinhoff plummeted 15.33% to R2.21 after Friday’s annual general meeting failed to reassure concerned investors about the group’s debt and accounting problems.

Clicks added 3.27% to R212.38 and Pick n Pay rose 1.32% to R77, both extending gains made last week when they delivered market-pleasing financial results.

Choppies jumped 9.09% to R2.40, despite threats of a strike from Tuesday at its South African operations.

At 5.40pm the Dow was up 0.17% to 24,502.27 points, while in Europe, the CAC 40 had firmed 0.4%, the FTSE 100 0.33% and the DAX 30 0.24%.

At the same time gold had fallen 0.89% to $1,323.30/oz and platinum 0.52% to $921.78/oz. Brent crude was up 0.22% to $73.85 a barrel.

The top 40 Alsi futures index added 0.67% to 51,560 points. The number of contracts traded was 14,055 from Friday’s 13,689.