JSE edges lower as investors digest conflicting trade signals

The JSE was slightly lower on Friday morning, with gains by rand hedges offsetting losses by banks and retailers. The rand was slightly weaker, with European and Asian markets marginally higher amid conflicting signals regarding the trade war.

At 9.30am the all share was 0.26% lower at 57,266.5 points and the top 40 was down 0.29%. Banks had fallen 1.22% and gold miners 1.15%, while platinums had gained 0.26%.

Markets are currently digesting the Chinese reaction to $34bn in tariffs imposed by the US on Friday morning, even as the US and EU make moves to reduce tension in their trading relationship.

Earlier in the week the US proposed dropping automotive tariffs entirely, with German Chancellor Angela Merkel saying on Friday that the EU was willing to do so.

The dollar had come under some pressure overnight, after US Federal Reserve minutes from its June meeting signalled that policy makers could raise rates over the next 12 months to a level that no longer aimed to stimulate the economy.

Officials also discussed strategies for managing rates if growth quickened to an untenable pace that would induce economic bubbles and high inflation, Dow Jones Newswires reported.

Focus is now expected to shift to US nonfarm payroll numbers at 2.30pm local time, which will be scrutinised in order to gauge the pace of the Fed’s monetary policy tightening. Consensus forecast is that US employers added 178,000 jobs in June.

Local news was downbeat, with reports suggesting the unions at Eskom were set to reject the utilities latest wage offer. They have promised further industrial action that would threaten power supplies.

The Reserve Bank also said earlier that SA’s gross reserves came in at $50.58bn in June, below May’s figure, and Trading Economics forecast of $51.15bn.

At 9.30am, diversified miner BHP was up 0.28% to R298.23, while Anglo American had dropped 0.32% to R307.29.

Rand hedge British American Tobacco was up 1.53% to R708.17 and Anheuser-Busch InBev 1.06% to R1,400.76.

Standard Bank had slipped 1.56% to R193.99 and FirstRand 1.6% to R64.54.

At the same time in Europe, the CAC 40 had gained 0.31%, the FTSE 100 0.25% and the DAX 30 0.1%.

Gold was 0.2% lower at $1,255.12 an ounce and platinum 0.17% to $840.76. Brent crude had dropped 0.53% to $77.19 a barrel.

Source: businesslive.co.za