Local bourse weaker as resources buckle

The JSE closed weaker on Wednesday led by moderate losses across most blue-chip stocks.

Trade tensions remain the dominant driver of market direction globally and as of Wednesday, most global indices retreated as the US threatened to target more Chinese technology firms.

In the United Kingdom, the pound sterling fell as pressure mounts on prime minister Theresa May to quit following her offer for a second referendum. Locally, Statistics SA released South Africa's inflation readings for the month of April.

Inflation year-on-year (y/y) slowed down to 4.4% from a prior recording of 4.5%, while inflation month-on-month (M/M) was recorded at 0.6% which was better than the forecasted 0.8%.

Attention now shifts to the SA Reserve Bank (SARB) on Thursday for its interest rate decision. The central bank is widely expected to leave rates unchanged.

On the JSE, Rebosis Property Fund [JSE:REB] fell as low as R0.92 before it closed 14.55% lower at R0.94, closing amongst the day's biggest losers.

One of the day's biggest drops was recorded in Sasol [JSE:SOL] which fell 12.99% to close at R375.00, following an update on the Lake Charles Chemicals Project which has overrun initial capital expenditure projections significantly.

Other listed property stocks also struggled on the day with losses being recorded for Redefine Properties [JSE:RDF] which dropped 6.7% to close at R9.05, as well as Delta Property [JSE:DLT] which lost 6.69% to close at R2.37.

EOH Holdings [JSE:EOH] lost 4.83% to close at R19.90, while mining giant Anglo American PLC [JSE:AGL] weakened by 2.12% to close at R349.30.

Metair Investments [JSE:MTA] rallied in Wednesday's session as it closed 6.36% higher at R22.76 as one of the session's biggest gainers. Lewis Group [JSE:LEW] managed to gain 4.62% to close at R34.00, while Motus Holdings [JSE:MTH] added 3.41% to end the day at R86.24.

Rand hedge, Mondi PLC [JSE:MNP] gained 2.61% to close at R311.10, while Bid Corporation [JSE:BID] rose 1.5% to close at R294.79. Financials traded mostly firmer on the day with gains being recorded for FirstRand [JSE:FSR] which added 1.41% to close at R65.64, as well as MMI Holdings [JSE:MMI] added 1.05% to close at R18.29.

The JSE All-Share index eventually closed 0.53% weaker while the JSE Top-40 index lost 0.59%. The mildly firmer rand buoyed the Financials index which managed to close 0.28% firmer while the Industrials index closed unchanged. The Resources index fell 2.41%.
 
The rand retreated from its overnight lows as it peaked at a session high of R14.33/$. At 17.00 CAT, the rand was trading 0.17% firmer at R14.36/$.
 
Brent crude fell on Wednesday as US crude inventories data showed a big increase in stockpiles. Brent crude was down 1.51% to trade at $71.08/barrel just after the JSE close.

At 17.00 CAT, Gold was 0.06% firmer at $1 275.54/Oz, Palladium was down 0.93% to trade at $1 310.75/Oz, and Platinum had lost 1.1% to trade at $807.60/Oz.

markets JSE

* Musa Makoni is a trading specialist at Purple Group.

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