Pressure mounts on JSE and other emerging markets as US raises rates

Johannesburg - The JSE barely managed to close firmer on Thursday, as it trended mostly lower along with other emerging market economies.

Emerging market currencies including the rand traded under pressure, following the interest rate hike announcement by the US Federal Reserve.

The US Fed indicated a significant shift from its post-2009 financial crisis monetary policy, which could spell the end of quantitative easing.

The fears for emerging markets arise from the fact that this could result in capital flows out of risky emerging markets and into a less precarious US economy.

The rand weakened to a session low of R13.34/$ against the greenback as the US dollar was buoyed by the rate hike.

The local currency did recover during the day to trade in positive territory, but gains were short-lived due to positive US economic data.

After reaching a session high of R13.10/$, the rand retraced to trade at R13.31/$ at 17:00.

Local mining production data also disappointed as it contracted by 4.3% year-on-year, worse than the estimated -3.6%. Month-on-month manufacturing production shrank by 2%, worse than the forecast of -0.4%.

On the JSE, Stadio Holdings [JSE:SDO] jumped 5.26% to close the day at R4.40 per share, while Pioneer Foods [JSE:PNR] posted gains of 4.41% to end the day at R113.29 per share.

Platinum miner Northam Platinum [JSE:NHM] closed 4.2% firmer at R35.74 per share, while its sector peer Impala Platinum [JSE:IMP] gained 4.69% to end the day at R23.00 per share.

On the blue-chip index, Mr Price [JSE:MRP] closed at R245.00 per share after leaping by 3.23%, while Shoprite [JSE:SHP] firmed by 3.14% to close at R237.00 per share.

Gold Fields [JSE:GFI] and AngloGold Ashanti [JSE:ANG] gained 2% and 1.88% respectively.

Among the day’s losers, African Rainbow Minerals [JSE:ARI] slipped by 2.33% to end the day at R112.88 per share, while Kumba Iron Ore [JSE:KIO] lost 1.44% to close at R299.12 per share.

Coal miner Exxaro [JSE:EXX] eased to R131.20 after dropping 1.5%, while healthcare provider Netcare [JSE:NTC] shed 1.09% to R28.98.

The JSE eventually closed 0.1% firmer after struggling for most of the session, while the JSE Top-40 index was 0.04% weaker.

The Industrials and Resources indices shed 0.27% and 0.06% respectively, while the Financials index managed to gain 0.94%.

Brent crude slid by more than 1% after Saudi Arabia reiterated that a deal to boost crude output was inevitable. The commodity was trading 1.13% softer at $75.87 per barrel just after the JSE close.

Gold was trading within a $10 range as it managed to peak at a session high of $1 309.37 per ounce.

At 17:00 it had retraced to trade at $1 305.30/oz, up 0.46% for the day. Platinum was 0.57% firmer at $908.86, while palladium was trading at $1013.07/oz, up only 0.1% on the day.

At 17:00 CAT, Bitcoin was trading 0.71% weaker at $6 414.00 per coin, while Ethereum was only 0.1% firmer at $474.25/coin.

The JSE market update is from GT247.coman online broker and authorised financial services provider.

ZAR/USD
16.81
(-0.26)
ZAR/GBP
21.34
(-0.12)
ZAR/EUR
19.02
(-0.13)
ZAR/AUD
11.73
(-0.21)
ZAR/JPY
0.15
(+0.60)
Gold
1681.70
(+0.13)
Silver
17.39
(+0.17)
Platinum
815.55
(+0.35)
Brent Crude
41.90
(+5.78)
Palladium
1949.00
(+0.59)
All Share
54722.38
(+2.85)
Top 40
50199.80
(+2.79)
Financial 15
11467.53
(+4.66)
Industrial 25
74264.52
(+2.52)
Resource 10
49969.31
(+2.29)
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