JSE closes flat as industrials gain while miners retreat

The JSE closed flat on Tuesday despite industrials outperforming on a recovery in Naspers following volatility in the share after the group released its interim results on Friday.

Among industrials‚ rand hedges were initially supported by the weaker currency‚ but lost some ground toward the close as the rand gained ground.

Commodity prices failed to support the market‚ with gold 0.59% lower at $1‚186.45 an ounce in reaction to a rampant dollar‚ while platinum retreated 0.70% to $919 an ounce.

The market’s reaction to the Naspers results has been choppy since their release‚ but on Tuesday the share ended the day 1.5% higher.

“We have seen huge volatility in Naspers‚ possibly related to the new capped SWIX index which could be adopted by most fund managers‚” said Stanlib retail investment director Paul Hansen.

The SWIX index caps any particular share at 10% of the index‚ whereas Naspers is now about 20% of the SWIX shareholder-weighted index. “Some fund members may have been selling Naspers to reduce their holding‚” Hansen said.

Naspers is 2.3% down for the year so far.

The rand weakened against the dollar on Tuesday afternoon when the ANC confirmed that the national executive committee (NEC) did not support the call for President Jacob Zuma to step down.

British American Tobacco and Anheuser-Busch performed well on the day. Sasol‚ however‚ disappointed on the sharp drop in the Brent crude price ahead of Opec’s production freeze meeting on Wednesday. At the JSE’s close Brent crude was down 3.21% to $46.49 a barrel.

The all share closed 0.07% off at 50‚157.30 points and the blue-chip top 40 was 0.03% softer. Resources were 1.45% lower‚ platinums 1.31% and the gold index 0.91%. General retailers gave up 1.32% lower‚ banks 0.91% and financials 0.28%. Industrials lifted 0.64% and food and drug retailers 0.35%.

The Dow Jones industrial average opened flat‚ despite the US third-quarter GDP growth forecast being revised higher‚ to 3.2%‚ in the second estimate.

European markets were mixed as market jitters on Sunday’s Italian referendum on constitutional reform continued. By the JSE’s close the FTSE 100 had shed 1.01% and Germany’s Dax 0.23%‚ while the Paris CAC 40 was 0.32% higher.

Analysts expect JSE trading to remain subdued and characterised by low volumes until at least Friday‚ when S&P Global Ratings will release the result of its review on the country‚ adding to those of Fitch and Moody’s‚ which came on Friday and Saturday respectively.

The need for sustained economic growth was what separated SA’s greater creditworthiness in the eyes of the three rating agencies‚ said Old Mutual Multi-Managers analyst Izak Odendaal.

“While economic growth was expected to improve in the next two years‚ the likelihood of a downgrade by at least one agency remains high‚ unfortunately‚” he said.

Among individual shares Anglo American lost 2.09% to R207.77 and BHP Billiton 2.18% to R227.24. Sasol ended the day 1.16% lower at R361.74.

British American Tobacco added 1.40% to R772.66 and Anheuser-Busch InBev 0.96% to R1‚455.09.

Barloworld jumped 3.11% to R107.23.

FirstRand fared worst of the big four losing 1.05% to R51.62‚ while Investec plc bucked the trend in the sector climbing 0.77% to R90.49.

Sanlam softened 2.05% to R62.69 but Old Mutual gained 0.46% to R32.80.

After jumping more than 2% at one stage‚ Naspers ended the day 1.52% higher at R2‚071.

Mediclinic dropped 1.81% to R122.50.

Mondi plc was up 1.22% to R282.50.

Private education group Curro Holdings was 1.28% lower at R48.57. The share now trades on a price-earnings ratio of 137‚ having come down from about 200 at one stage.

Transaction Capital gained 1.78% to R14.85‚ while Brait softened 0.43% to R86.05.

TMG Digital/BusinessLive