Gold and platinum prices drag JSE down in subdued trade

January 9, 2018

Mumbai-India (Jan 9)  By midday on Tuesday the JSE was trading marginally weaker on a mixed performance by resources stocks, particularly gold, which was not enough to offset advances in heavyweights such as BAT and Naspers.

At 12.17pm the all share index was 0.04% lower at 60,012 points, while the resources index was 0.56% better, the industrial index 0.17% softer and the financial index 0.22% down. The small cap index had risen 0.15%, thus far bearing out analysts’ predictions at the weekend that 2018 would be the year that small companies perform.

Global markets were largely higher, despite a small drop in the Dow Jones overnight to close off its recent peaks. The Nikkei 225 ended 0.57% stronger and the Hang Seng up 0.36%. But the FTSE 100 was 0.31% lower on worries about the performance of key retail shares and a shake-up of the UK Conservative Party cabinet that was branded a "shambles".

The rand continued to soften, touching R12.43/$ from Thursday’s R12.38/$, on concerns that an early exit of President Jacob Zuma was unlikely. The currency fell to R14.84 against a stronger euro. Brent crude was almost flat at $67.88 a barrel.

As spot gold dropped to $1,315.02/oz and platinum to $960.90/oz, they took SA’s gold and platinum producers with them. AngloGold Ashanti fell 2.22% to R128.99 and Gold Fields by 3.56% to R51.74. Sibanye Gold, which also produces platinum, eased 1.1% to R16.15 and Anglo American Platinum retreated 0.6% to R381.15.

But Glencore rose 0.95% to R66.99 and Anglo American 1.76% to R278.83, reflecting the continuing strength of base metals prices, particularly copper and zinc.

Steinhoff International was off its earlier lows but still 13.71% weaker at R7.26 after reports that the European Central Bank had sold all its Steinhoff bonds.

Other SA retailers were also trading lower, possibly anticipating a weak Christmas trading season in line with their UK peers. Clicks was 0.56% down at R176 and Pick n Pay fell 0.45% at R68.59.

Among financial counters, Sanlam slid 1.52% to R82.22.


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