JSE closes softer as risk-off trade offsets slightly firmer rand

The JSE closed weaker on Friday as risk-off sentiment reigned amid renewed concerns about an escalating global trade war.

This was evident as banks and retailers retreated sharply on the day on a marginally stronger rand and in a firmer euro environment.

The rand rose by 0.2% or 5c against the dollar after US non-farm payroll data came in better than expected, but a higher unemployment rate and stable wage growth pointed to a less hawkish stance from the US Federal Reserve.

Non-farm payrolls in the US increased by 213,000 in June, following an upwardly revised 244,000 in May, well above expectations of 195,000. Wage growth was unchanged at 2.7% and the unemployment rate rose from 3.8% to 4%.

The dollar weakened sharply by 0.56% against the euro as the common currency firmed to $1.1760. The euro was also supported by upbeat German data, with industrial output in the European powerhouse expanding by a monthly 2.6% in May, significantly above expectations.

Markets were digesting the Chinese reaction to $34bn in tariffs imposed by the US on Friday morning, even as the US and EU made tentative attempts to ease tensions in their trading relationship. The step by the US is seen as the start of a trade war between the world’s two biggest economies, Dow Jones Newswires reported.

As promised, Beijing has responded in kind, with levies on the same value of 545 US goods, including agricultural products, vehicles and aquatic products. Earlier, US President Donald Trump threatened to escalate the trade tensions by imposing further duties on more than $500bn in Chinese imports — roughly the amount of total goods the US imported from China last year, the newswires reported.

Brent crude was 0.85% lower at $77 a barrel on flat commodity prices.

The Dow Jones was 0.18% up at the JSE’s close. The FTSE 100 was flat and the DAX 30 lost 0.11%.

The all share closed 0.17% lower at 57,313.90 points and the top 40 dropped 0.14%. Banks shed 1.77%, general retailers 1.03%, food and drug retailers 1%, and financials 0.8%. The gold index added 0.45%, the platinum index 0.32% and industrials 0.10%. The all share ended the week 0.52% lower.

Anglo American slipped 1.2% to R304.57 but Glencore gained 0.67% to R58.95.

British American Tobacco rose 0.56% to R701.40 but Richemont lost 0.59% to R112.32.

Anglo American Platinum added 1.43% to R358.39.

Standard Bank lost 2.57% to R192 and FirstRand 2.09% to R64.22.

Discovery closed 0.93% lower at R151.57.

Steinhoff rose 4.38% to R1.67 but Star slipped 0.89% to R16.65.

In the property secto,r Schroder lost 0.97% to R19.31 but Nepi Rockcastle gained 0.92% to R124.55.

Naspers ended the day 1.47% higher at R3,438.53.