Investors cash in after JSE’s latest super run

SOUTH African stocks ended lower on Friday as investors cashed in recent gainers such as AngloGold Ashanti and Richemont after a string of record highs.

Standard Bank bucked the downward trend, ending flat after Africa’s biggest lender said it was in talks to sell its London trading business.

“We didn’t have a lot of positive news to keep us going,” said Lavan Gopaul, an analyst at brokerage 28E Capital Stockbrokers.

“In almost every sector there were casualties.”

The JSE Top 40 index gave up 1.3% to 40 699. The index has hit a series of historic highs in recent weeks, and is now trading at a price-to-earnings ratio of 20, placing it among the world’s most expensive emerging-market equity indices. The All Share index fell 1.27% to 45 481.

AngloGold Ashanti dropped 3.8% to R154.75. Its share price rose over 5% in the five previous sessions.

Richemont fell 1.34% to R103.20. The luxury goods maker said on Friday it would not sell some underperforming businesses, disappointing analysts’ hopes for a quick solution.

Trade was active, with over 208 million shares changing hands according to preliminary data. Declines outnumbered advancers by a ratio of more than 2 to 1.

An unexpected surge in US jobs growth during October boosted the dollar and sent US Treasury bonds sharply lower on Friday by raising expectations that the Federal Reserve could begin scaling back its economic stimulus as soon as December.

The dollar rose broadly, reversing a recent trend in which it has fallen on speculation that the Fed would not start reducing its $85billion a month in bond purchases until next year.

A Fed cutback at a time when the European Central Bank and Bank of Japan are in easing mode would boost the dollar’s appeal.

The dollar index, which tracks the greenback versus a basket of six currencies, rose 0.61% to 81.338, edging back towards a near twomonth high of 81.46 on Thursday.

The euro fell 0.57% to $1.3341, having hit a session low of $1.3355.

US Treasury prices fell. The benchmark 10-year US Treasury note was down 36/32 in price to yield 2.7439%. The Dow Jones industrial average was up 78.73 points, or 0.5%, at 15 672.71. The S&P500 index was up 11.28 points, or 0.65%, at 1 758.43. The Nasdaq Composite index was up 38.86 points, or 1.01%, at 3 896.19.

In Europe, the pan-regional FTSEurofirst 300 index fell 0.21% to 1 294.28. MSCI’s all-country world index lost 0.12%.

Brent crude oil steadied under $104 a barrel, near its lowest since early July, as Western powers stepped up efforts to reach a deal with Iran over its nuclear programme that could provide some relief from sanctions.