JSE closes weaker as miners weigh in wake of strong US jobs data

06 August 2016 - 10:41 By Madeleine Van Niekerk

The JSE closed lower on Friday following the release of better than expected July US jobs data earlier in the afternoon‚ increasing the likelihood of a possible US interest-rate increase this year. Nonfarm payrolls rose by a seasonally adjusted 255‚000 in July. Revisions showed US employers added 18‚000 more jobs in May and June than previously estimated‚ Dow Jones Newswires reported.The unemployment rate was unchanged at 4.9% in July. Economists surveyed by The Wall Street Journal had expected employers would add 179‚000 jobs in July alongside an unemployment rate of 4.8%‚ the newswire said.The JSE all share closed 0.37% weaker at 52‚348.40 points and the top 40 index gave back 0.32%.Most of the major indices closed in the red‚ with gold miners leading the declines‚ falling 3.21% amid weaker commodity prices due to a stronger dollar. The platinum index gave up 3.45%.Bankers were the only ones to close in positive territory‚ with the index up 0.15%‚ after having recorded solid recent gains on a stronger rand.Barclays Research analysts said the strong July US employment report indicated that the US labour market’s health remained intact and it reduced near-term recession risk for the US economy.The print should boost Federal open market committee (FOMC) members’ confidence in the US economic outlook‚ especially following the unexpected weakness in second quarter gross domestic product print‚ they said.The analysts continued to expect the Fed to increase rates at its September meeting‚ and they looked to chairwoman Janet Yellen’s appearance at the Jackson Hole policy symposium on August 26 for confirmation of this.At the JSE's close‚ the Dow Jones industrial average had climbed 0.84%. Major European markets were also firmer in late trade.Fed-funds futures‚ which are used to place bets on central-bank policy‚ showed on Friday that investors and traders saw an 18% likelihood of a rate increase at the Fed's September meeting‚ compared with 12% before the jobs report‚ according to CME Group‚ as reported by Dow Jones Newswires.Meanwhile the price of Brent crude traded lower after its strongest two-day rally in more than a month. The global oil benchmark was last seen 0.43% lower at $43.93.This followed on the market slipping into a bear market in early July‚ with prices coming off more than 20% from this year’s highs reached in June‚ London-based broking company SP Angel analysts said in a note.This comes after the Bank of England (BoE) decided to cut its benchmark rates by 25 basis points to 0.25% on Thursday and to resume its asset purchases programme.The central bank will buy £60bn in bonds‚ taking the total stock of these asset purchases to £435bn‚ and £10bn in sterling-denominated‚ non-financial‚ investment grade corporate bonds‚ the analysts said.The BoE also launched a £100bn “term funding scheme” under which lenders may borrow at rates close to the benchmark in an attempt to help banks to pass on lower borrowing costs to households and businesses‚ they said.Among individual shares on the JSE‚ Sasol closed 2.31% lower at R363.38 amid softer oil prices and after the company reported a slight decline in sales of petrol and diesel in the year ended June‚ on Friday.Sasol’s sales of petrol and diesel declined marginally to 58.8-million barrels in the year to June 30 from 59.2-million in the year earlier period. Its total fuel sales‚ including chemicals like bitumen‚ which is used to make tar‚ grew to 2.5-million barrels from 2.3-million barrels.BHP Billiton added 2.96% to R182.13.Gold miner AngloGold Ashanti shed 4.37% to R299.06 and Harmony slumped 5.02% to R61.50.In the platinum sector‚ Anglo American Platinum fell 3.9% to R444 and Lonmin declined 4.12% to R40.25.FirstRand added 0.8% to R48.90 and Standard Bank eked out a 0.28% gain to R144.92.MTN gave up 2.79% to R129.82‚ after declaring a R2.50 interim dividend on Friday‚ despite falling into a R2.71 headline loss per share. The group’s overall revenue grew 14% to R79bn in the six months to end-June from the year earlier period.Diamond miner Trans Hex (TSX) closed unchanged at R3.70 after trade in its shares was suspended on Friday. The company said in a Sens announcement that the trade halt would be lifted after the publication of a detailed announcement to be published in due course.TMG Digital/BDlive..

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