Picture: MICHAEL ETTERSHANK
Picture: MICHAEL ETTERSHANK

THE JSE all share closed down on Tuesday in risk-off trade ahead of the US Federal Reserve’s interest rate decision on Wednesday.

Markets were trading nervously for most of the day ahead of the Fed’s Federal open market committee (FOMC) decision, despite the likelihood of US interest rates remaining unchanged.

Markets expect a hawkish stance in the central bank’s statement, resulting in the selling of risky assets, as further US rates hikes would be in the offing this year.

Market sentiment was also negative on renewed lower oil prices. The Brent crude price was 2.6% lower at $38.62 in the late afternoon.

Commodity prices dropped in response, with the JSE all share recording broad-based losses. The stronger dollar also affected mining stocks negatively, with gold shares making a late recovery.

Rand hedges, however, were higher after the rand fell more than 40c against the dollar on news of renewed conflict between the Hawks and Finance Minister Pravin Gordhan.

The JSE all share closed 0.42% lower at 52,253.80 points after trading more than 1% weaker at one stage. The blue-chip top 40 lost 0.35%. Platinums slumped 5.07% and resources shed 2.58%. Banks dropped 1.42%, industrials ended the day flat (0.05%) and the gold index rose 1.21%.

At the JSE’s close the FTSE 100 was 0.50% lower and the Paris CAC 40 had dropped 0.95%. The German Dax had lost 0.70% and the Dow Jones industrial average was 0.13% lower.

Mergence Investment Managers portfolio manager Dirk Steyn said commodity stocks dropped on the day, but rand hedges firmed on the weaker currency.

Anglo American was a major casualty, dropping nearly 10%. "There is still a lot of uncertainty on the sustainability of the mining rally, with some funds going underweight on Anglo," Mr Steyn said.

He said the all share was expensive at present levels, "but not ridiculously so".

There were still some pockets of value in the market, mainly with mid-caps, and shares such as Remgro and Netcare.

Remgro’s interims on Monday were not well received by the market. Mr Steyn ascribed this to Mediclinic’s issue of a convertible bond on Tuesday, potentially diluting some of Remgro’s shareholder value.

Remgro owns 42% of Mediclinic, its biggest investment at present.

Anglo American plunged 9.64% to R110.24. Anglo’s gains this year have now dropped to 59% from 90% last week. Glencore fell 4.97% to R31.57 and Kumba Iron Ore fell 8.27% to R84.50.

Anheuser-Busch InBev rose 2.58% to R1,870.06 and SABMiller added 2.03% to R960.92. British American Tobacco ended the day up 2.54% to R911.48.

Among platinum shares, Impala dropped 8.56% to R42.08.

Nedbank was down 1.14% to R172.93, but Old Mutual firmed 2.14% to R43. Sanlam gave up 2.67% to R59.67.

Among retailers, Massmart Holdings was 4.13% weaker at R120.62.

MTN closed 4.06% lower at R139.06. This followed a statement from the company saying that the Nigerian authorities had lifted the suspension on regulatory services to MTN Nigeria with immediate effect.

Remgro closed 2.66% lower at R242.63. Netcare dropped 2.10% to R33.58, while Mediclinic was down 3% to R194.