JSE opens flat as banks recover from Gordhan fallout

Banks were under pressure on the weaker rand and foreign selling following the threat by the Hawks to arrest Finance Minister Pravin Gordhan. The banking index closed 5.13% down on Wednesday.

Gordhan’s statement after the JSE’s closure that he would not present himself to the Hawks stemmed the slide in the rand and banks as some confidence returned.

However‚ the mood remained fragile as the market is still concerned about the possible next steps‚ which may include the removal of Gordhan as minister by President Jacob Zuma.

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At 9.25am‚ the all share was 0.10% lower at 53‚507.10 and the blue-chip top 40 lost 0.05%. Financials rose 0.82% and banks added 0.77%. In contrast with the previous session‚ gold and platinum stocks failed to support the market‚ as the gold index shed 2.98% and platinums lost 1.61%. Resources dropped 1.50%.

The Dow Jones industrial index closed 0.35% lower on Wednesday with the Hang Seng flat on Thursday morning (+0.03%) while the Nikkei lost 0.25%.

The Dow was under pressure following remarks by Democratic presidential candidate Hillary Clinton accusing pharmaceutical companies of charging exorbitant prices. That caused weakness in healthcare stocks.

Gold shares remain in a weakening trend ahead of US Federal Reserve chair Janet Yellen’s speech at Jackson Hole on Friday. The dollar has firmed in anticipation of a more hawkish speech‚ sending the gold price lower.

TreasuryOne dealer Andre Botha said it seemed that the market was suffering from "stuff-up fatigue" following the Gordhan tensions.

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"Market players were wondering what will be stuffed up next and are hardly breaking a sweat anymore when things go haywire‚" he said.

Market speculation has shifted to a possible removal of Gordhan as minister. "Market reaction could then be more swift to levels where we thought it would initially go when the news on Gordhan first broke‚" Botha said.

Among the big miners Glencore was 2.35% weaker at R33.26 following disappointing interim results which saw coal output falling sharply.

Sibanye was 5.88% lower at R61.17. It reported operating profit jumped to R5.4bn to end June from R2.4bn in the comparable period in 2015.

FirstRand led the gains among banks‚ climbing 1.03% to R47.23. Barclays Africa added 0.91% to R156.41.

Woolworths rose 2.04% to R87.24 after reporting that annual headline earnings per share to end June rose 23.2%.

Massmart was 2.01% down at R131.31. Interim gross profit to end June grew 10.9% to R8.2bn from R7.4bn at end June 2015.

Among property stocks Growthpoint rose 2.03% to R26.65.

- TMG Digital/BDlive