JSE extends broad-based losses as Naspers sheds 3%

The JSE extended its losses on Tuesday, as a slight reprieve for the rand earlier lifted some banks and retailers, although those gains were given back shortly before the local bourse closed.

Currency markets gave equities much of their direction with rand hedges lower on the day, while property stocks and gold miners led the losses.

Market heavyweight Naspers fell a further 3.38% to R3,098.50, having now given up 6.32% since the release of its full-year results on Friday.

The all share fell 1.14% to 55,254.7 points and the top 40 lost 1.14%. Gold miners fell 3.46%, property stocks 1.77%, industrials 1.74% and financials 0.79%.

Risk assets had found some support from comments by US officials downplaying the extent of investment restrictions on Chinese companies, details of which would be released later in the week.

Trade concerns, however, were expected to continue to weigh on sentiment.

Solid fundamentals continued to underpin global growth in the short term, but geopolitical risks such as trade tension were amplifying uncertainty, BlackRock global chief investment strategist Richard Turnill said. “Portfolio resilience is crucial now … we prefer up-in-quality exposures in fixed income, favouring investment-grade debt.” Companies with deep balance sheets should also be considered.

Interest-rate sensitive stocks are now under some strain as the rand falls, with some speculation that the Reserve Bank may need to raise interest rates in the coming months in order to protect the local currency.

Despite the rand’s depreciation, the Reserve Bank was not likely to raise interest rates in 2018, Capital Economics analysts said. Instead it may welcome the depreciation after previously describing the rand’s rally earlier in 2018 as unsustainable, and was likely to be more interested in any effect on inflation.

In other companies, Glencore lost 2.34% to R65.48 and British American Tobacco gave up 1.1% to R676.05.

Sibanye-Stillwater plummeted 11.19% after another mine worker was killed at its Driefontein operation on Tuesday.

Quilter rose 0.78% to R27.01 on its second day of trade.

Recently listed Grindrod Shipping rose 4.42% to R130.

Steinhoff African Retail fell 4.61% to R16.57, after it emerged that its subsidiary, Tekkie Town, was likely to be ejected from its business premises in George, which is owned by the founder of Tekkie Town, Braam van Huyssteen.

Shortly after the JSE closed the Dow was flat at 24,266.05 points, while in Europe, the DAX 30 had fallen 0.59% and the FTSE 100 was up 0.28%.

At the same time, gold was 0.52% lower at $1,259.04 an ounce, while platinum was flat at $867.77. Brent crude had lost 0.72% to $74.33 a barrel.