The JSE closed lower on Wednesday amid growing concerns about lower Chinese growth and concerns about European instability emanating from the Ukraine crisis.
The market was under pressure for most of the day, with the sentiment fragile even after current account deficit data proved better than expected, as it remains at high levels relative to global benchmarks. Global markets provided little support with the Dow Jones down 0.39% at the JSE’s close, while the FTSE 100 lost 0.98%. The Paris CAC 40 was 1.36% lower, while the Hang Seng lost 1.65%.
At 5pm the all share closed 0.89% lower at 47 188.84, with the top 40 index losing 1.04%.
All the major indices, barring gold and platinum, were down, led by banks, which lost 1.60% and resources, which gave back 1.13%. Financials were down 0.89% with industrials headed south by 0.80%. The gold index, however, was up 1.35% and platinum 0.24%.
Afrifocus portfolio manager Ferdi Heyneke said the market was not cheap but that it tended to bounce back after falling periodically. “The underlying trend remains relatively stable.”
He ascribed the market fall on Wednesday mainly to short-term and speculative actions. “The weaker performance by the mining houses, however, can be related to China, with concerns about growth increasing.”
Geopolitical tensions, such as in the Ukraine, could put export companies under pressure as a large part of SA’s exports are to Europe. “But overall the trend globally remains firm.”
There are still many good-news developments locally, with banks affected by some profit-taking. “Industrials such as Mondi, Remgro and Bidvest remain steady after experiencing some pullbacks recently,” he said.
Among individual shares Sasol (SOL) lost 1.55% to R576 after climbing strongly to new highs since beginning March. Diversified global mining resource group Glencore Xstrata (GLN) led the weaker closures at the mining house by softening 2.26% to R55.81. Anglo American (AGL) lost 1.70% to R257.15.
British America Tobacco (BTI) proved the exception among the rand-hedges, closing 0.35% stronger at R583.84, but SABMiller (SAB) lost 1.62% to R514.79.
Evraz Highveld Steel and Vanadium (EHS) closed 1.43% lower at R13.75 after reporting an operating loss of R239m for the year ended December.
Gold Fields (GFI) was the winner among gold shares, closing 3.56% up at R43.87 with Harmony (HAR) gaining 3.41% to R37.32.
Among the bigger banks, FirstRand (FSR) lost 2.16% to R34.35 after a range of analysts rated the share fully valued at present prices despite it delivering the best earnings growth among the Big 4 recently. Standard Bank (SBK) was 1.12% lower at R123.13.
Unsecured lender African Bank (ABL) crashed 4.77% to R9.99 but JD Group (JDG) bounced back, closing 6.44% up at R20.65.
Among telecommunication shares, Telkom (TKG) held up well, gaining 0.65% to R32.58, but MTN (MTN) lost 0.34% to R204.13.