South African markets closed in the red yesterday, led by losses in the tech and mining sector stocks and shaving off the gains made during the week.
The JSE All Share Index fell 0.8% to 73 225 points while the Top40 Index also eased 0.8% to 67 100 yesterday, trading in negative territory for the first time this week since the re-election of Cyril Ramaphosa as ANC president.
Mining and metals companies led the charge with the losses as the industrial metals and mining index fell 2% to 34 082 points, while the resources index lost 1.9% to 1 437 points and the precious metals and mining index fell 1.9% to 54 873 points.
But the oil, gas and coal index moderated slightly by 0.1% to 212 886 points.
Platinum miners Northam and Sibanye-Stillwater lost 3% to R184.80 per share and 2.5% to R45.35 per share, respectively, while diversified miner African Rainbow Minerals eased 2.3% to R281.07 per share.
On the flip-side, pharmaceutical company Netcare was among the top gainers on the JSE, surging 1.8% to R14.79 per share yesterday, followed by Sasol and Telkom both rising 1.5% to R165 and R29.79 per share, respectively.
Meanwhile, investors continued to monitor economic data from the world’s largest economies for clues about the global outlook for next year.
Fresh economic data in the US has raised concerns that further monetary tightening would be necessary which could hurt the economies even further, and push the global economy into a recession.
The final estimate for gross domestic product (GDP) growth showed the US economy expanded 3.2% in the third quarter, higher than the 2.9% in the second quarter.
At the same time, the claims report continued to point to a healthy labour market, which together with a stronger GDP number strengthened the case for the US Federal Reserve to continue raising interest rates and eventually resort to more aggressive policy.
Gold prices held above $1 810 (R31 077) an ounce, hovering near its highest levels in six months and benefiting mainly from recent dollar weakness after a surprise hawkish move from the Bank of Japan.
The yellow metal was also boosted by fears that further monetary tightening from the Fed could tip the world’s largest economy into a recession in 2023.
Some analysts are speculating that a sharp economic downturn in the US next year could force the Fed to shift policy earlier than expected, which is a bullish case for gold.
Brent crude oil climbed towards $83 per barrel, rising for the fourth straight session as an expected surge in travel for the holiday season is threatening to exacerbate tightening US energy supplies.
Oil prices were also supported by an improving demand outlook in top crude importer China, as the country appeared intent on ending its strict zero-Covid policy and delivering more pro-growth measures centred on reviving consumption.
Meanwhile, Eskom will today table its annual results for the financial year ended March, 2022 which is expected to reveal a loss of at least R28 billion.
Eskom CEO André de Ruyter resigned last week after three years at the helm, as the utility struggles to end load shedding while it pushed power cuts to Stage 6 again this week after breakdowns at power stations.
The power utility is running at very low energy availability factors (EAFs), a measure of electricity output compared with installed capacity, and has applied to the energy regulator for a 32% tariff increase in the 2023/24 financial year.
Commercial farmers have slammed the proposal and said the agricultural sector cannot afford this increase.
The Transvaal Agricultural Union of South Africa (TLU SA) yesterday said the price of electricity was one increase too far for agriculture and it would be the death knell for several farmers in the country.
TLU SA president Henry Geldenhuys said they realised the urgency of the situation and for that reason they were going to write to the minister of energy and the National Treasury as it was necessary for the government to intervene.
“We cannot just accept it and leave it like it is… The reality is agriculture cannot afford the increase,” Geldenhuys said.
“Farmers already must deal with increased diesel and fertiliser prices (the price has increased by 150% in certain cases) to name just two.
“As things stand, the situation is already bad and for some too bad. Then I’m not even talking about the impact of load shedding. This hinders farmers’ ability to perform their daily tasks,” Geldenhuys warned.
BUSINESS REPORT