Equity markets jittery ahead of Powell's speech

Cape Town - The JSE and European equity markets were on edge ahead of the US Fed chair Jerome Powell's speech at Congress.

The JSE traded softer on Thursday as direction was mainly derived from commodity markets as well as the rand.

However, with the most recent sell-off emanating from Powell's testimony on Tuesday, market participants were focused on the Fed governor’s testimony set to start at 17:00 CAT.

The rand weakened against the greenback mainly because the US dollar extended its gains against a basket of major currencies. The US dollar index peaked at an intra-day high of 90.932 index points before retracing to trade at 90.883 index points. The USD/ZAR weakened to a low of R11.94/$ and at 17:00 CAT it was trading at R11.91/$.

JSE equities were softer, but to a lesser extent compared to Wednesday. One of the biggest losers on the day was Steinhoff [JSE:SNH] which lost 12.07% to close at R5.10 per share. This was mainly on the back of the suspension of JSE listed notes issued by Steinhoff Services.

Other retailers traded under pressure due to the weaker rand, which saw stocks such as Pick n Pay [JSE:PIK], Steinhoff Africa Retail [JSE:SRR] and Woolworths [JSE:WHL] lose 4.62%, 4.18% and 1.93% respectively.

Listed property stocks Greenbay Properties [JSE:GRP] and Fortress B [JSE:FFB] shed 3.55% and 4.88% respectively, whilst diversified miners BHP Billiton [JSE:BIL] and Anglo American PLC [JSE:AGL] lost 2.92% and 2.94% respectively.

Ascendis Health [JSE:ASC] was the standout performer on Thursday as it jumped 15.53% on the back of an  impressive set of 6 months earnings results.

SA Corp Real Estate [JSE:SAC] which came under significant pressure on Wednesday, recouped some of the losses as it ended the day 3.42% firmer.

Capitec Holdings [JSE:CPI] led the blue chip counters to end the day up 2.25%, whilst GrowthpointProperties [JSE:GRT] and Shoprite [JSE:SHP] gained 1.73% and 1.20% respectively. Tiger Brands [JSE:TBS] added 1.00% whilst Naspers [JSE:NPN] gained 0.70%.

The JSE All-Share Index closed 0.69% weaker whilst the JSE Top-40 Index lost 0.72%. The Financials Index surprisingly closed in the green as it gained 0.25%. However the Industrials and Resources indices lost 0.42% and 2.73% respectively.

Gold came under pressure due to the stronger US dollar to reach an intra-day low $1 304.76/Oz. This dragged JSE listed gold miners such as Harmony Gold [JSE:HAR] and Gold Fields [JSE:GFI] which lost 2.67% and 0.76% respectively. At 17:00 CAT Gold was trading at $1 306.23/Oz.

Palladium took quite a tumble as it slid more than 4% from Thursday's high of $1 045.80/Oz to reach an intra-day low of $997.51/Oz. Platinum slid more than 2% to reach an intra-day low $961.65/Oz and just after the close it was trading at $962.51/Oz. Palladium was trading at 998.50/Oz just after the close, and it looked set to come under some more pressure.

Brent Crude held steady earlier on but it subsequently slipped below $64/barrel to reach a day’s low of $63.37/barrel. The commodity was trading at $63.63/barrel just after the close.

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