JSE ends lower as banks and retailers are sold off amid risk-off sentiment

The JSE closed weaker on Thursday on renewed risk-off sentiment as US President Donald Trump’s administration made it clear it does not fear a global trade war.

The Trump administration has threatened to more than double proposed tariffs on $200bn of Chinese goods to 25%, up from an original 10%. While the administration didn’t give specific reasons for the potential increase, industry officials who have discussed the move with the White House say one reason is to compensate for a declining yuan, Dow Jones Newswires reports.

The Chinese currency has weakened by more than 7% to the dollar in the past three months. Senior administration officials said they would ask for comments from industry on both proposed tariff levels. A final decision on the rate isn’t expected until September, at the earliest.

The White House has “upped the game”, said Naeem Aslam, chief market analyst at ThinkMarkets, in a note. “The trade tensions are making investors risk-averse today.”

In the UK, the Bank of England (BOE) raised interest rates by 25 basis points to 0.75%. “The statement from the monetary policy committee (MPC) continued to signal the need for a gradual pace of tightening,” Barclays Research analysts said. The pound weakened against the dollar after BOE’s forward view on rates was judged to be dovish.

A shock announcement by Impala Platinum on rationalisation had a limited effect on shares in the sector, with the index ending the day higher amid a firmer platinum price. It gained 1.2% to $829 an ounce, with Implats ending the day 3.32% higher at R19.89.

Implats, the world’s second-largest platinum producer, said it will cut its future production to 520,000 ounces of platinum and slash the number of its mines to six from 11, with 13,000 jobs to go within two years.

The rand had a torrid day, weakening more than 1% against the dollar, to R13.4160 soon after the JSE’s close, from R13.2298. It hit R13.5108 in intra-day trade.

The Dow was 0.45% lower at the JSE’s close, despite Apple becoming the first $1-trillion company in history. European markets were also in the red.

The all share closed 1.62% lower at 56,470.70 points and the top 40 lost 1.83%. Banks dropped 2.47%, general retailers 1.85%, financials 1.73%, industrials 1.69%, food and drug retailers 1.59% and resources 1.46%.

Anglo American lost 2.31% to R289.97.

Remgro dropped 2.79% to R209.60.

Standard Bank shed 3.17% to R196.64 and FirstRand 2.08% to R67.34.

Liberty Holdings gained 1.69% to R118.37 on flat interim results. Diluted headline earnings per share (HEPS) declined just 1% in the six months to end-June. Its dividend was kept unchanged.

Among retailers, Mr Price shed 1.84% to R228.71, Woolworths 2.58% to R50.94, and Shoprite 3.48% to R209.02.

Property group Redefine lost 2.06% to R10.48.

Naspers dropped 2.87% to R3,175.32.

Source: businesslive.co.za