Sell-off on the JSE Continued Yesterday for a Second Consecutive Day

 

Johannesburg—Sunburst Africa—The JSE All-Share Index closed 0.25 percent in negative territory on the JSE yesterday after trading lower on Tuesday June 19th. Among  top losers of the day were Kumba Iron Ore Ltd (JSE Code: KIO), down 5.8 percent,  Tiger Brands Ltd (JSE Code: TBS) down 4.5 percent,  MTN Group Ltd (JSE Code: MTN), Anglogold Ashanti Ltd (JSE Code: ANG) down 2.4 percent and Life Healthc Grp Hldgs L (JSE code: LHC)  down 1.5 percent.

Index Value Move (%) Time*
All Share 54 192 -135 (0.2%) 1715 20 May
Fin & Ind 73 738 -214 (0.3%) 1715 20 May
Industrial 68 633 -242 (0.4%) 1715 20 May
Gold 1 129 -30 (2.6%) 1715 20 May
Top 40 47 994 -149 (0.3%) 1715 20 May

 

Yesterday, Wall Street traded flat to lower as investors awaited the minutes to the Feds meeting from last month. The Dow traded in the red by -0.02%, while the S&P 500 traded -0.06% lower, and Nasdaq traded -0.18% down.  Asian markets closed higher on a surprising rise in the pace of first quarter GDP growth. The Nikkei closed +0.85% higher, while the Hang Seng closed lower by -0.39%. European indices traded flat after rebounding strongly in previous sessions.

Financials were in focus today. The DAX traded lower by -0.08%, while the CAC 40 was higher by +0.04% and the FTSE 100 traded +0.09% higher. At local close Oil(Brent) traded higher by +1.33% at $64.87,  while Gold traded higher by +0.33% at $1210.70. The dollar traded 0.39% stronger against the EURO at EUR/USD $1.1107. On the local front the All Share index closed lower by -0.25% and the rand traded 0.31% stronger against the dollar at R/USD 11.8718.

This morning, Asian stocks advanced for the first time in three days as investors weighed the minutes of the Federal Reserve’s last meeting and awaited China manufacturing data.

The MSCI Asia Pacific Index rose 0.1 percent to 153.02 as of 9:02 a.m. in Tokyo. The USA Fed minutes released yesterday reinforced the view that interest rates will probably be boosted in the second half of this year. China factory activity may show improvement this month; preliminary estimates from HSBC Holdings Plc and Markit Economics due today are expected to show, according to economists surveyed by Bloomberg.

Given that the US FED has decided to maintain the status quo on interest rates-this is good news for stocks at the moment. Fed officials last month didn’t expect to raise rates at their June meeting even as they concluded that a first-quarter economic slowdown was unlikely to persist, the meeting minutes showed. A couple of members said they anticipated the economy would be ready for a June liftoff.

Japan’s Topix index has added 0.3 percent. South Korea’s Kospi index was little changed in early morning trade. Australia’s S&P/ASX 200 Index gained 0.2 percent, while New Zealand’s NZX 50 Index lost 0.2 percent. Markets in China and Hong Kong are yet to open.

Markets on the JSE should open cautiously today as investors digest the impact of the increased consumer inflation data released yesterday. Investors will also be watching what will come out of the SA Reserve Bank MPC meeting today. Expectations are that the interest rates will be left unchanged.

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