Gold stocks lead decline across the board at midday

Johannesburg-SA (Deb 28)  The JSE was lower on Tuesday at midday in subdued trade, weighed down by declines across most sectors, led by gold shares. Market focus was on US President Donald Trump’s address to the US congress on Tuesday.

Trump’s address has markets on high alert as he was expected to shed light on his stimulus programme, which may lead the way for interest-rate increases. Higher rates enhance investor appetite for holding interest-paying instruments such as bonds.

Rand Merchant Bank analyst Michelle Wohlberg said if Trump did not deliver‚ a slight risk-off move could be expected and treasuries should rally.

At midday the all share was down 0.39% to 51,298.3 points and the blue-chip top 40 lost 0.42%

The price of gold was down 0.15%, as was the gold-mining index, shedding 3.85%. Resources were down 0.42% while platinums lost 0.64%

The Dow Jones industrial index was 0.08% up while the FTSE 100 shed a marginal 0.03%.

European markets were mostly mixed while Asian markets closed with the Nikkei 225 flat (+0.06%). The Hang Seng lost 0.77% while the Shanghai Composite gained 0.4%.

Harmony Gold led the big precious-metal miners with a 5.13% loss to R31.99 followed by Sibanye, which lost 4.72% to R26.46. Gold Fields dropped by 4.49% to R39.32.

Diversified miners were mixed with Glencore gaining a marginal 0.17% to R52.22. Anglo American lost 0.77% to R202.54.

Rand-hedge stocks made marginal gains despite a relatively firmer strong rand. British American Tobacco was up 1.01% to R819.31 and AB InBev 0.36% to R1‚410.96. Richemont was 0.19% up to R95.48.

Bidvest lost 3.9% to R156.94 despite having delivered satisfactory results in the six months to December. Its revenue was rose 4.1% to R36bn.

Food retailers were under pressure — Spar lost 2.07% to R180.20 and Shoprite 0.86% to R190.69.

Source: BusinessDay