JSE weakens on US Fed’s caution

The JSE closed lower on Thursday, after the US Federal Reserve downplayed expectations that it may lower interest rates further after a 25-basispoint cut on Wednesday.

Varying views among policymakers regarding the US interest rate decision damped market expectations that the Fed may embark on an easing cycle. Three members voted against Wednesday’s cut and one proposed a 50-basis-point cut.

Locally, the Reserve Bank kept the interest rate at 6.5%, which was the consensus among 18 economists polled by Bloomberg. The Bank revised its inflation forecast for 2019 down to 4.2%, from 4.4% previously.

“Barring significant shocks, monetary policy in major advanced economies will remain accommodative over the medium term. However, market expectations of further accommodation appear high, creating ongoing risk of market volatility should these not materialise,” Reserve Bank governor Lesetja Kganyago said.

At 5.20pm, the rand was flat to R14.6827/$, while it had weakened 0.17% to R16.2297/€ and was unchanged at R18.3379/£. The euro had firmed 0.22% to $1.1053.

Gold added 0.29% to $1,498.39/oz and 1.42% to $939.91. Brent crude was up 1.42% to $64.50 a barrel.

Shortly after the JSE closed, the Dow was up 0.35% to 27,242.67 points. In Europe, the FTSE 100 added 0.62%, France’s CAC 40 0.65% and Germany’s DAX 0.57%. Earlier, the Shanghai composite rose 0.46% and Japan’s Nikkei 225 0.38%, while Hong Kong’s Hang Seng fell 1.07%.

The JSE all share fell 0.17% to 56,123.80 points and the top 40 0.11%. Platinum miners dropped 1.04% and industrials 0.18%.

Blue Label Telecoms gained 3.77% to R2.75. It expects its headline and core headline earnings per share (HEPS) to decrease more than 20% in the year to end-May.

Kumba Iron Ore slumped 5.33% to R392.90 and Assore 6.16% to R277.52.

Mr Price rose 0.79% to R159.05. The retailer said earlier that it faced potential financial exposure of between R10m and R20m in an investigation into a relationship between two senior managers and one of its suppliers.

Texton climbed 4.73% to R3.10, after it said on Thursday that its diluted earnings and HEPS grew 107.5% to 55.61c in the year to end-June.

Caxton jumped 8.38% to R7.50. The publishing company said on Thursday that its HEPS fell 6.8% to 101.6c in the year to end-June.

Remgro gained 1.56% to R177.43, despite reporting that HEPS fell 4.2% to 1,448.9c in the year to end-June.