Shares feel pain of tumultuous year

SHARES on the JSE fell fairly sharply on Friday as they entered the final stretch of a year marked by big surprises, from the UK vote to leave the EU to Donald Trump’s triumph in the US presidential election.

The two events have had a marked effect on sentiment, with Brexit in particular taking the shine off some JSE-listed stocks that have previously delivered good shareholder returns.

The UK is home to a range of South African companies in healthcare, financial services and other sectors.

The All Share index shed a further 2.84% to close at 49 256.10 points this week, its weakest level since February.

Stock losses were largely concentrated in the resource and industrial sectors, which together carry a big weighting in the local share market.

Impala Platinum and Lonmin surrendered 9% and 16% respectively as the platinum price dipped. Diversified mining stocks, which have been strong for the better part of the past month, came off the boil in line with a pullback in copper and iron-ore prices.

Assore gave up 13% and Exxaro Resources dropped 22%. Exxaro was also hit by Anglo American’s sale of its 9.7% interest for R3-billion.

The Industrial 25 index, which has outperformed the All Share since at least 2008, fared poorly this week. Netcare and Steinhoff led the broadbased decline in the sector.

Further afield, US non-farm payrolls data on Friday were broadly in line with market expectations, at least on the headline number. The US economy created 178 000 jobs last month, up from a revised 142 000 in October.

“There’s good and bad news in the report beyond the headline number,” said Oanda senior market analyst Craig Erlam. “All things considered, the Fed is still extremely likely to raise interest rates in a couple of weeks but the path after is likely to remain slow.”

Opec also featured prominently this week when it agreed to reduce output for the first time since 2008.