In­vestors pile into gold safe haven

Business Day - - MARKETS - Karl Ger­net­zky Mar­kets Writer ger­net­zkyk@busi­nesslive.co.za

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.

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