JSE closes lower, banks and retail stocks weigh
THE JSE closed weaker on Friday with all the main indices closing in negative territory, while the platinum price made strong gains on the back of violence at Lonmin’s Marikana mine this week.
At 5.10pm the platinum price had gained 2.06% to trade at $1,462.50 due to supply concerns. South Africa supplies 80% of global platinum demand.
"The platinum industry has been wanting shafts to close due to oversupply of platinum in the market, but the industry needs closures through calculated decisions, not due to violence as seen at Lonmin," said Ryan Wibberley, equity dealer at Investec Asset Management in Cape Town.
Platinum is used to manufacture catalytic converters for cars, but demand for cars in Europe is lower due to eurozone economic problems, and therefore there is an oversupply of platinum.
"We will probably see equilibrium return to the platinum market fairly soon," Wibberley added. "We had a weaker day today, with retailers showing big losses due to foreigners selling."
"SA did not have a great day today with sentiment damaged in the mining space due to the problems at Lonmin, which was reflected in the lower rand today. We saw negative sentiment around the weaker rand, and investors wanted to take risk off the table. We have had a strong week and now we have seen some consolidation," he added.
Lonmin closed 40 cents weaker at R83.30. Thirty-four people were killed in a shooting on a hilltop near Lonmin mine at Marikana in Rustenburg‚ national Police Commissioner Riah Phiyega said on Friday. A total of 259 people were arrested and six firearms recovered.
At 5.00pm the JSE all-share index was trading 0.55% softer at 35,547.33 points, with banks leading the downside, off 1.08%.
Among retailers Truworths lost R5.43, or 5.27%, to R97.57 and The Foschini Group shed R8.49, or 5.96%, to R134.00.
Meanwhile US stocks opened higher, following strength overseas, ahead of consumer sentiment data. At 4.55pm the Dow Jones Industrial Average was a tad higher, at 13,251 points.
Elsewhere world markets were trading stronger on Friday, with the London’s FTSE 100 index last seen up 0.14% and the Paris CAC 40 up a fraction (0.05%).
Supportive comments on the euro from German chancellor Angela Merkel helped sentiment. Ms Merkel said that Germany was "committed to do everything we can in order to maintain the common currency". Her comments were seen as supporting European Central Bank president Mario Draghi’s vow to save the euro.
Another local counter that made big moves was Harmony closing R5.35, or 6.24%, lower on Friday, to R80.36. The company on Thursday reported a headline loss per share of 20 cents for the June quarter, after HEPS of 234 cents for the March quarter.
In the banking sector Absa gave up R2.06, or 1.44%, to R141, and RMB and First Rand both lost just over 1.5%.
Media group Avusa closed 17 cents softer at R22.63 on Friday. Times Media Group’s bid for Avusa was successful on Thursday after shareholders voted in favour of the deal.