Local stocks softer as manufacturing data disappoints

The JSE retreated on Thursday as it went against the tide in other major global indices.
Although modest, there was broad-based weakness recorded across most sectors on the JSE.

This contrasted with earlier trends in Asia where the Hang Seng closed 0.57% firmer, while the Nikkei and Shanghai Composite Index inched up 0.11% and 0.18% respectively. Stocks in Europe traded mostly firmer.

In the US the tech-heavy Nasdaq opened slightly weaker, while the S&P 500 and Dow Jones opened flat.
Global sentiment was being driven by news that China had agreed with the US to roll back tariffs on each other's goods in phases. This is, however, dependent on the progress made in the agreement, which is still to be cast in stone, despite hints that a finality might only be reached in December.

Locally, Statistics SA released South Africa's manufacturing production data for the month of September. Manufacturing production year-on-year contracted by 2.4% from a prior contraction of 1.5%, while manufacturing production month-on-month was also recorded at -2.4% from a prior expansion of 1.3%.

There was further disappointment via the SACCI Business Confidence indicator, which fell 91.7 from a prior recording of 92.4.

On the local bourse, losses were led by cement maker PPC Limited [JSE:PPC] which fell following a gloomy half-year trading statement. The stock fell 12.31% to close at R3.42.

Retailer, The Foschini Group [JSE:TFG] came under pressure despite releasing a decent set of half-year results as it closed 2.87% weaker at R166.72. Shoprite [JSE:SHP] lost 2.43% to close at R137.99, and Truworths [JSE:TRU] lost 1.98% to close at R52.52.

Nampak [JSE:NPK] continues to struggle and on Thursday lost another 3.38% to close at R7.43. Other significant losses on the day were recorded for Anglo American Platinum [JSE:AMS] which lost 2.27% to close at R1 151.36, and Discovery [JSE:DSY] which closed at R128.74 after losing 2.05%.

Arrowhead Properties [JSE:AHB] found momentum towards the close as it surged 7% to close at R3.67. Dis-Chem Pharmacies [JSE:DCP] had a volatile session following the release of its half-year results, as it slumped briefly after the open before rebounding to eventually close 5.21% firmer at R25.25.

RCL Foods [JSE:RCL] clawed back from the prior session's slump as it rallied 5.99% to close at R9.56, while Grindrod [JSE:GND] rose 4.48% to close at R4.90. Gains were also recorded for Aspen Pharmacare [JSE:APN] which climbed 3.85% to close at R113.85, and South32 [JSE:32] which closed at R28.03 after gaining 3.47%.

The JSE All-Share index eventually closed 0.41% softer while the JSE Top-40 index shed 0.36%. Industrials dropped 0.48%, resources lost 0.53% and the financials index shed a more modest 0.18%.

The rand found momentum as the greenback slipped against a basket of major currencies. The rand was trading 0.42% firmer at R14.73/$ at 17:00 CAT.

Brent crude found its footing again following heavy declines in the prior session. It was recorded trading 1.25% firmer at $62.53/barrel just after the JSE close.

At 17:00 CAT, platinum was up 0.21% at $931.60/Oz, palladium was 0.72% firmer at $1 806.00/Oz, and gold was down 0.43% at $1 483.92/Oz.

* Musa Makoni is a trading specialist at Purple Group.

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