Breaking News

SA stocks fall as FirstRand, Absa drag banks lower

SA stocks fall as FirstRand, Absa drag banks lower
SA stocks fall as FirstRand, Absa drag banks lower

South Africa’s main stock index halted a two-day advance, falling 0.6% by 10:04 a.m. in Johannesburg. This was after declines following trading statements from FirstRand and Absa countered gains from a stronger rand, pulling banks lower, and as index heavyweights, Naspers and BHP fell.

The rand strengthened for a third day, buoyed by news that the country is preparing to ease Covid-19 lockdown restrictions.

“The stalemate in the US around a stimulus package took the shine off the dollar,” said Matete Thulare, a Johannesburg-based analyst at Rand Merchant Bank, in a note to clients. “Also helping the rand stronger was the news that President Ramaphosa is preparing to ease lockdown restrictions, although details still remain sketchy.”

Weakness in Johannesburg stocks comes as the global equities rally shows signs of fatigue, with markets in Asia and Europe declining.

The index of bank stocks failed to get a boost from the stronger rand, and fell 3% to a one-week low, after trading statements from FirstRand and Absa dampened sentiment.

FirstRand fell for a second day, down 2.8% after the bank said it sees earnings declining as much as 45% on the back of higher-than-expected credit losses and impairment charges

Absa fell 6% after the bank said it sees earnings declining as much as 85% in the first half after the country’s lockdown weighed on the economy and record-low interest rates cut lending income.

Standard Bank fell 1.9%, Nedbank Group 3.8%, Investec Plc 0.2%.

Other stock movements:

Naspers, with a 18% weighing on the index, retreated 1.4% to provide the biggest drag on the market, as partly-owned internet giant Tencent fell in Hong Kong after telling investors that the US ban on its WeChat messaging service would only have a modest impact on the world’s largest gaming corporation.

Naspers subsidiary Prosus NV, which holds the company’s 31% stake in Tencent, fell 1.6%.
Iron ore producers and gold miners dragged the gauge for mining stocks down 0.6%.

BHP fell 1.1%, as the company faces a call from some investors to put a moratorium on any mining activity that threatens indigenous cultural heritage sites in Australia until laws are strengthened.

Anglo American fell 1%, AngloGold Ashanti 0.9%, Gold Fields 0.8%, Impala Platinum 0.6%, Glencore 2.1%, and Harmony Gold 0.5%.

Foreigners were net sellers of South African stocks Wednesday, disposing of R3.05 billion worth of shares, according to the JSE.

Culled from Moneyweb

Source link