Why the JSE closed lower yesterday
What: The gains on the market on Monday were reversed on Tuesday as the JSE THE JSE closed lower. At 5pm, the all share closed 0.15% lower at 54,327.10 points, with the blue-chip top 40 giving up 0.25%. Gold miners dropped 3.86%, followed by resources losing 3.46% and platinums down 2.26%. Financials added 1.04%.
Why: The pressure on the JSE came from a selloff in resources and mining stocks following weaker commodity prices. The weakness in commodity prices was triggered by a firmer dollar after hawkish US Federal Reserve Bank comments. Some Analyst attribute the fall in resource prices which went down to 4 percent at some stage to lower commodity prices as the dollar strengthens following hawkish comments from Federal open market committee (FOMC) members last night and better than expected housing data on Tuesday out of the US.
Losses in Exxaro and Kumba Iron Ore, which are both invested in Sishen Iron Ore, were “significantly more pronounced” following a trading statement in which Exxaro said that headline earnings would be more than 20% lower than the comparative period, although the news was not completely unexpected, he said.
Exxaro shed 4.17% to close at R89.60 and Kumba Iron Ore was off 4.77% at R154.
Among other shares that moved on Tuesday, Anglo American retreated 2.24% to R196.16 and rival BHP Billiton was off 4.76% at R260.02.
South32, which was spun off from BHP Billiton on Monday, bucked the trend on its second day of trading on the domestic bourse. South32 surged 7.21% to R21.70.
Gold Fields shed 4.76% to R43.40 and Harmony lost 5.76% to R18. Anglo American Platinum dropped 4.37% to R297.40.
PPC closed 7.24% higher at R18.95 after the cement company said on Tuesday that first-half headline earnings per share slid 38% to 60c.
Wall Street traded flat to lower on disappointing corporate earnings. The Dow traded in the green by +0.04%, while the S&P 500 traded -0.05% lower, and NASDAQ traded -0.10% down. Asian markets closed higher on the back of previous days rally on Wall Street. The Nikkei closed +0.68% higher, while the Hang Seng closed higher by +0.37%. European indices traded near multiyear highs on hopes of a deal for Greece with creditors. The DAX traded higher by +1.74%, while the CAC 40 was higher by +1.81% and the FTSE 100 traded +0.32% higher. At local close Oil (Brent) traded lower by -2.02% at $64.93 while Gold traded lower by -1.08% at $1214.40. The dollar traded 1.60% stronger against the EURO at EUR/USD $1.1138. On the local front the All Share index closed lower by -0.15% and the rand traded 0.38% weaker against the dollar at R/USD 11.9249.