Kumba, slump in markets drag local stocks lower

STOCKS fell yesterday weighed down by Kumba Iron Ore, which traded ex-dividend, as well as a slump in markets as investors bet the US Federal Reserve would raise interest rates sooner than expected.

Johannesburg’s Top40 index lost 1.25 percent to 46 644.35 points, while the wider all share index shaved off 1.37 percent to 52 614.08.

Kumba slumped 7.3 percent to R188.19 after the company said it would be paying a dividend of R7.73 for shares purchased before Friday, and led to a sell-off in the market.

Gold Fields was the biggest decliner on the all share index, tumbling 7.71 percent to R44.30, a level last seen in December. Anglo American Platinum fell 3.17 percent to R329.72.

The resources index slid 2.08 percent and gold 5.37 percent, the most in five months, as gold and platinum hovered around three-month and almost six-year lows respectively.

“Japanese gross domestic product (GDP) was worse than expected (and that) pulled down commodity prices and led to resources overall performing poorly today (yesterday),” Nerina Visser, a strategist at Exchange Traded Fund South Africa, said.

Japanese GDP rose an annualised 1.5 percent in the October-December quarter, revised data showed yesterday, less than the preliminary reading of a 2.2 percent increase as consumer spending and capital expenditure weakened.

European shares fell, tracking moves in Asia following forecast-beating US jobs data that last week stoked expectations the Fed would bring closer the timing of a rate hike.

The rand fell to a new 13year low after investors sold off emerging market currencies.

But Sasol bucked the downward trend, as its shares climbed 1 percent to R410.06, after the petrochemicals company reported higher first half earnings despite depressed oil prices.

Stefanutti Stocks soared by 26 percent, the most since August 2007, to close at R6.30. It predicts that total earnings per share will be 55 percent to 75 percent higher.