Fear of cabinet reshuffle outweighs firming on JSE in precious metals shares

The JSE drifted lower on Tuesday on fears that President Jacob Zuma’s state of the nation address would be a prelude to a cabinet reshuffle.

Lacklustre US markets led Asian markets lower. The Nikkei shed 0.35% to 18910 points and the Shanghai composite 0.12% to 3153 points. The Dow was 0.09% lower at 20052 points on profit-taking.

Weakness in the industrial‚ financial and food and drug retailers and banking indices weighed on the JSE and the strength of the resource 10‚ gold mining‚ platinum‚ and general retail indices could not offset it.

Nedbank Corporate Investment Banking Analysts said although the glut of iron ore‚ copper and oil price continued prices were rallying on changing fundamentals.

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Data out on Tuesday morning included foreign reserves figures from the Reserve Bank and the Business Confidence Index (BCI) from the South African Chamber of Commerce and Industry (Sacci).

The Bank reported that gross foreign reserves fell by $690m to $46.7bn in January. Rating agencies watch this figure closely as it is an indicator of a country’s ability to repay foreign debt in the short term.

Sacci said the BCI rose by 3.9 index points to 97.7 points in January from 93.8 points in December‚ and was 5.1 index points higher than January 2016’s 92.6 index points. The chamber said this suggested improved business prospects after tough 2016.

At noon the all share was 0.36% lower at 51‚964.7 points while top-40 index lost 0.41% to 45‚168 points.

Industrials lost 0.69%‚ financials 0.40%‚ food and drug retailers 0.36%. The gold index was up 0.82% and platinums 0.17%‚ resources 0.38% and banks 0.06%

Sasol eased 1.04% to R385.06 and Kumba 0.48% to R195.80.

ArcelorMittal was up 1.84% at R13.85 after saying on Tuesday that it had cut its headline loss 80% for the year to December.

In golds‚ Harmony rose 3.76% to R36.95 and Pan African Resources 1.48% to R27.50.

Impala Platinum added 1.08% to R52.24 while Anglo American Platinum lost 1.02% to R341.92.

Nedbank Bank eased 0.89% to R225.97 and Standard Bank 0.25% to R140.27.

In financials‚ African Phoenix Investment fell 4.44% to R43.

Sanlam fell 1.09% to R61.72 and Discovery 0.28% to R115.15.

Woolworths eased 0.35% to R70.91 and Shoprite 1.45% to R172.92.

Massmart retreated 1.55% to R128.72.

Murray & Roberts dropped 2.27% to R10.75.

Redefine Properties was 1.64% lower at R10.79

- TMG Digital/BusinessLIVE