BD: JSE opens weaker as traders await rates decision
THE JSE all share was slightly weaker at the opening on Tuesday as Asian markets traded inconsistently and US markets closed flat on Monday.
Traders are awaiting the Reserve Bank’s rate decision, which is due on Thursday. Rand Merchant Bank (RMB) said in a note that not knowing how aggressive the US Federal Reserve would be when it began hiking rates could partially explain the uncertainty around the Fed’s interest rate hiking cycle.
Larger than expected hikes from the Fed could "be enough to justify an aggressive stance by the Reserve Bank", RMB said.
But the fall in the oil price, a restrictive local fiscal policy, lower inflation and weaker growth could point to unchanged rates or at least limited increases.
In Asian markets, the Nikkei 225 was up 2.18%, while the Hang Seng was down 1.11%.
The Dow and S&P 500 both closed 0.07% firmer on Monday.
At 9.30am‚ the all share index was down 0.15% to 50‚436.78 points and the blue-chip top 40 lost 0.21%.
Resources led the market lower, losing 0.52%, and industrials fell 0.14%. Gold shares gained traction for the second consecutive day, adding 2.90% and platinums were up 0.83%. Banks and financials were both up 0.12%.
US markets remained expensive. Imara SP Reid said in an early morning note that the third-quarter earnings reporting season had now been consigned to the rear-view mirror. "The potential adjustment in policy positions from central banks are gradually starting to take centre stage."
Comments by European Central Bank (ECB) president Mario Draghi that the central bank remained committed to further stimulus measures had little effect on European markets.
On the JSE, resources remained "exceptionally oversold" with industrials encountering some profit-taking. "Further marginal technical improvements is suggested for gold counters," Imara said.
Among individual shares, PPC shed 4.34% to R25.78 after reporting flat full-year headline earnings per share (HEPS) on Tuesday.
IT company Business Connexion gained 0.48% to R6.34. It reported diluted HEPS for the year ended August 2014 fell to 23.6c from 34.1c in the year-earlier period.
Anglo American was down 1.36% to R235.72 and BHP Billiton lost 0.82% to R288.69.
Sibanye Gold was the major gainer among gold stocks, adding 4.19% to R20.63. Harmony gained 3.62% to R18.60.
Naspers lost another 1.36% to R1,482.18 as profit-taking kicked in for the second day after the share hit a record on Friday.
Mr Price fell 1.23% to R241.
Construction company Group 5 was up 2.32% to R29.58 after tumbling 17.4% on Monday.
Among banks, Standard Bank gained 0.33% to R138.02. Barclays Africa was up 0.29% to R176.50.
Taste Holdings was up a further 2.19% to R3.26. The company said on Monday that sales in all four of its Domino’s pizza outlets had exceeded expectations.
