JSE spotlight on iron ore as most indices tread water

Johannesburg - Iron ore was the focus of attention on the JSE on Friday, after iron prices jump sharply on indications of a brewing trade dispute between the United States and China.

Prices of commodities linked to the steel industry rose sharply on expectations of increased demand from the US, after US President Donald Trump said on Thursday that he would launch an investigation into anti-competitive practices from China's steelmakers.

As a result the JSE's Resources index was almost 1% up at mid-morning, pulled higher by companies such as Kumba [JSE:KIO], Exxaro [JSE:EXX] and Anglo American [JSE:AGL], which have interests in iron ore and coking coal. This was despite the further firming of the rand, which normally has a negative effect on resources shares.

The local resources sector took its lead from European steelmakers which traded firmly higher on Friday, with mining stocks following suit. By mid-morning the Resources index on the JSE was 0.74% higher after gaining more than 1.3% in earlier trade.

The rest of the market was however listless, with indices showing marginal losses and low volumes as the rand strengthened to R13.14 to the dollar at mid-morning.

At that stage the All-share index was 0.13% softer at 52 428 points and the Top 40 index 0.11% lower at 45 685 points. The big loser was the Industrial index, which shed 0.46% as the major dual-listed shares were dented by the strong rand. The Financial index was also treading water, losing only 0.13%.

Gold lost further ground but losses were modest and the index shed 0.45%.

Trump's comments on Thursday lifted iron ore prices by more than 6% to about $73.45 a tonne and coking coal prices, a key ingredient in the steelmaking process, gained 5.5%. Prices of other basic materials were also rising.

Iron ore producer Kumba [JSE:KIO] was the centre of attention on the JSE with the share price at mid-morning rising 2.81% to R183.51, after earlier reaching as high as R186.78. Assore [JSE:ASR], the other iron ore producer, was 1.84% stronger at R222.96.

Anglo American, Kumba’s holding company, gained 1.20% to R194.12 but the share in earlier trade was as high as R196.07. Exxaro, which holds a stake in Kumba and also owns coal interests, was 1.86% stronger at R112.55.

BHP Billiton [JSE:BIL], which has huge iron interests in Australia, gained 1.24% to R203.30 after surging strongly on the London market.

Among the big dial-listed shares Naspers [JSE:NPN] traded 0.68% lower at R2 462.00 and Richemont [JSE:CFR] lost 1% to R103.40. Steinhoff [JSE:SHF] was 0.43% softer at R64.22.

FirstRand [JSE:FSR] and Nedbank [JSE:NED] were again the busiest banking shares, with FirstRand gaining 0.43% to R64.22. Nedbank continued its recent decline and lost 0.69% to trade at R223.50.

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