Mining stocks drag SA markets down from record high
By John Viljoen
(Bloomberg) – South African stocks retreated from a record as shares in miners tumbled the most in a month, with metals prices falling amid doubts regarding the approval of a US stimulus package.
The benchmark FTSE/JSE Africa All Share Index dropped 0.5% from Thursday's all-time high. The gauge still narrowly eked out a third consecutive weekly gain for the first time since August after closing at record peaks on five days this month.
Anglo American led declines, sliding 3.4%, while global diversified mining peer BHP Group dropped 2.1%. African Rainbow Minerals was the worst performer in the local index of mining stocks, falling 5.2%. The sector gauge lost 1.5% in its sharpest descent since December 18, tracking declines in European peers, which headed for their worst session since October.
Some metals have been trading at multi year highs and the mining index had risen 12% in January as of Thursday's close, boosted by investor optimism that President-elect Joe Biden's long-awaited relief package will help economies rebound. But the focus on Friday turned to how much of the proposals, unveiled overnight, will ultimately be approved by lawmakers in Washington.
Locally, traders in mining stocks were also digesting the latest developments in South Africa's coronavirus response, with the government announcing that the reopening of schools will be delayed by two weeks. The country is also in the second of four days of rolling power cuts after the state-owned utility reported a malfunction at a newly built plant and other operational issues.
Declining stocks outnumbered gainers by 79 to 58 in Friday's session.