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Stocks drop, gold sector tracks price lower

Mr Price tops the blue-chip.

South African stocks fell on Thursday, amid global risk-off trade, with mining shares among the biggest decliners on falling metal prices and concerns about rising costs.

The price of gold hit one-month lows after robust economic data fuelled speculations on the timing of US interest-rate increase, which had led to a sell-off across emerging markets.

AngloGold Ashanti fell 4.71% R108 and Harmony Gold shed 3.10% to R16.55 as spot gold fell 0.7% an ounce.

“It’s not looking good for the gold mining industry. The costs of mining are going up – that’s labour, and Eskom is putting the price for electricity up shortly,” said Greg Davies, an equities trader at Cratos Capital.

Cash-strapped power utility Eskom has requested the energy regulator to approve a 25.3% tariff increase.

The All-share index pulled back 1.02% to 51,323.68 and the Top 40 Index was 1.08% lower at 45,585.39.

On the upside, retailer Mr Price topped the blue-chip, rising 4.61% to R241.65 as brokerage house JP Morgan upgraded its rating on the stock to ‘overweight’, Davies said.

Volumes were robust, with 203 million shares changing hands, well above last year’s daily average of 183 million. 

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