Investors pile into gold safe haven

The JSE was caught up in the global sell-off of equities on Thursday, sliding 1.11%, but well off its worst levels.

A sell-off of US tech heavyweights has spooked investors, with the all share posting its eighth consecutive session of losses.

Local gold miners alone had a good day, rising 10.24% to a nine-month high, as investors piled into the precious metal, which is seen as a safe haven. The all share fell 1.11% to 52,229.3 points and the top 40 1.23%. Banks fell 2.33% and financials 2.04%.

Asian and European markets were sharply lower on the day, with some relief coming from a firmer rand. The dollar was under pressure after US President Donald Trump once again criticised the US Federal Reserve’s monetary policy tightening path.

Rising US treasury yields have primed fears of a market correction after a solid year for US equities, despite growing risks, analysts said.

“While people are naturally pointing to the bond market to explain the sudden panic — most notably Trump who has been laying the groundwork for blaming the Fed for the last couple of months — I wonder whether the underlying risk in the markets for some time has left markets primed for a correction and investors have simply fled at the first sign of danger,” Oanda analyst Craig Erlam said.

Local news was more positive, with manufacturing production in August rising 1.3% on an annualised basis, well ahead of the Trading Economics consensus forecast of 0.6% growth.

Sasol slumped 3.67% to R520.82. AB InBev gave up 1.77% to R1,245.48, Richemont 2.02% to R106.11 and British American Tobacco fell 1.76% to R659.01.

Harmony Gold surged 18.84% to R28.83, Sibanye 13.46% to R11.13 and Anglogold Ashanti 9.18% to R136.88.

Standard Bank lost 2.97% to R159 and Absa 2.32% to R144.62. Vodacom lost 2.88% to R119.56, MTN 2.61% to R84 and Telkom 2.26% to R49.70. Naspers gained 0.91% to R2,681.28. Mondi fell 1.38% after the paper and pulp producer said underlying earnings before interest, tax, depreciation and amortisation (ebitda) was up 30% to €466m in the third quarter to end-September.

Steinhoff fell 6.28% amid reports that its former CEO, Markus Jooste, had warned some of his friends to sell the company’s shares just days before accounting irregularities at the global retailer were made public.

Shortly after the JSE closed the Dow was down 0.59% at 25,447.88 points, while in Europe, the FTSE 100 had given up 1.72%, the CAC 40 1.27% and the DAX 30 0.98%.

At the same time gold had risen 1.75% to $1,215.27 an ounce and platinum 0.85% to $831.08.

Brent crude was 1.58% lower at $81.19 a barrel.