The JSE plummeted 2.64% as the mining rout continued and energy counters slipped on a slump in commodity prices as the US Federal Reserve’s tapering talk spooked investors.
Bloomberg reports metals markets have been pressured by ongoing concerns over growth in top consumer China and worries that the Federal Reserve may soon start curbing massive stimulus that helped drive prices higher over the past year. The fast-spreading delta coronavirus variant is adding to investor anxiety, with recent soft data in the US and China suggesting the global economic recovery is stalling.
A 12% drop in iron ore filtered through to JSE-listed producers of the steelmaking material, with Kumba Iron Ore (-7.94%) leading the slide. BHP (-1.22%), Anglo American (-3.24%) and Glencore (-2.31%) all too stumbled.
Platinum miners Northam and Implats too took an over 7% hit, with Angloplat dropping 6.20%. The price of platinum dropped more than 2% and was last trading at $967 and gold stayed steady at around $1,780, but palladium suffered a 3% whipping to last trade at $2,341.
Sasol slumped 7.61%, tracking oil’s dive to a 3-month low below $65 a barrel
Gold stocks were among the rare winners, with Gold Fields adding 3.40% and AngloGold 2.60%.
In corporate announcements, Gold Fields reported its profits more than doubled in the half-year to June, African Rainbow Minerals (-4.61%) expects full-year profits to be between 130% and 138% higher than the previous year and Standard Bank (-1.25%) posted a 52% gain in group earnings to R11.5bn in the six months to end-June.
In the forex markets, the rand took a pounding, breaching the R15-mark against the US dollar in early trade and swiftly losing ground to last trade at R15.19/$ amid the FOMC fallout. The local unit is the weakest emerging market currency at the moment, which suggests that the whole basket of EMs are under pressure, with the rand being used as its proxy, comments TreasuryONE.
The forex trading house says “an intense red day on the commodity front” is also a reason for the rand’s rout.
“The key to watch is the US dollar as another run in the greenback could see further rand losses. However, we believe that the US dollar and rand moves are a bit overextended, and a move lower could be in the offing,” says TreasuryONE.
Indicators as at 17:00
Currencies
USDZAR 15.1598
EURUSD 1.1683
EURZAR 17.7059
GBPUSD 1.3660
GBPZAR 20.7021
AUDZAR 10.8457
CADZAR 11.8281
CNYZAR 2.3334
ZARJPY 7.2345
CHFZAR 16.5054
USDAOA 637.60
Equities and bonds
R186 7.36%
US 10 Year 1.25%
JSE -2.77%
FTSE -1.76%
S&P 500 -0.32%
Commodities
Gold $1 780.80
Plat $971.75
Plad $2 347.25
Rhod $18 990.00
Irid $5 190.00
Ruth $723.00
Copp $8 775.35
Brent $65.68
Iron Ore 62.5% $159.59
Coal API4 $141.00
Gold ZAR R26 988.74
Plat ZAR R14 727.29
Indicators brought to you by TreasuryONE
