JSE erases earlier gains as rand rallies

The JSE erased earlier gains to close softer on Thursday after a reversal in index heavyweight Naspers as well as most counters on the resources index.
The local bourse did open firmer as it tracked Asian markets which had a buoyant session on Thursday.

This was also aided in part by Tencent Holdings which closed 1.09% firmer on the Hang Seng, which saw Naspers open firmer in Johannesburg. In Japan the Nikkei closed 1.19% firmer, while in mainland China and Hong Kong the benchmark indexes rose 1.07% and 1.42% respectively.

The turnaround on the JSE was triggered by the stronger rand which rallied to a session high of R14.13/$. This resulted in rand hedge stocks weakening including miners which fell on the back of lower rand-denominated metal commodity prices.

The rand was trading recorded trading 0.57% firmer at R14.14/$ at 17.00 CAT.
There were some positives for South African producers as data indicated lower producer inflation for the month of May. According to Statistics SA, PPI MoM in May was recorded at 0.5% from a prior recording of 1.3%, while PPI YoY marginally slowed to 6.4% from a prior recording of 6.5%.

Blue Label Telecoms [JSE:BLU] struggled on the day as it fell 9.66% to end the day at R4.58 to close amongst the day's biggest losers, while commodity trading giant Glencore [JSE:GLN] lost 8.3% to close at R46.10. Omnia Holdings [JSE:OMN] gave up some of the prior session's gains as it fell 5.43% to close at R35.18, while Telkom [JSE:TKG] dropped 2.63% to close at R92.30.

Anglo American Platinum [JSE:AMS] retreated to close 4.18% lower at R824.18, while coal miner Exxaro Resources [JSE:EXX] closed at R174.05 after losing 2.22. Index giant Naspers [JSE:NPN] eventually closed 1.49% weaker after closing at R3369.65.

Murray & Roberts Holdings [JSE:MUR] rallied 5.79% to close at R14.44 after the announcement that ATON had extended the long stop date for its mandatory offer to 30 September 2019. Other top gainers on the day included Metair Investments [JSE:MTA] which gained 4.97% to close at R23.88, Zeder Investments [JSE:ZED] which added 2.59% to close at R3.57, and Brait [JSE:BAT] which climbed 2.45% to close at R19.26. EOH Holdings [JSE:EOH] rose 1.21% to end the day at R20.00, while South32 [JSE:S32] closed at R32.02 after adding 1.27%.

The JSE All-Share index eventually closed 0.58% lower while the JSE Top-40 index lost 0.67%. All the major indexes closed lower on the day. Industrials shed 0.6%, Resources lost 0.4% and Financials dropped 0.79%.

Brent crude was a touch softer from its overnight highs as it was recorded trading 0.18% weaker at $65.55/barrel just after the JSE close.
At 17.00 CAT, Palladium was 1.14% to trade at $1541.30, Platinum had lost 0.5% to trade at $812.00, and Gold was 0.32% weaker at $1404.63/Oz.

* Musa Makoni, is a trading specialist at Purple Group.

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