JSE extends losses despite some optimism on global markets

The JSE was flat in thin volumes on Tuesday morning, bolstered slightly by global equity markets, albeit in a cautious environment.

Most local equities were little moved in the morning session, although losses by market heavyweight Naspers and Capitec weighed on the all share index.

Global trade was mildly risk-on, after German Chancellor Angela Merkel struck a deal with rebellious members of her government’s coalition on Tuesday evening. This helped sooth investor concern regarding political stability in Europe’s largest economy.

The rand was slightly firmer on Wednesday morning as a result, although the closure of US markets on Wednesday and upcoming risk events this week could subdue activity.

Naspers was slightly lower, with the Hong Kong Hang Seng facing selling pressure after being closed on Monday, when global markets were lower.

Investors are watching US data due out on Thursday and Friday, while the major risk event remains the Friday deadline for the US’s imposition of additional tariffs on China.

Mid-week suggestions were that the US President Donald Trump administration would fall short of applying the harshest possible measures to China, said Franklin Templeton analysts.

Despite this, analysts have cited poor economic data out of China and decreased confidence as a result of trade conflict as reasons for bearish sentiment in that country.

South African miners were under strain due to the firmer rand, although major local banks were flat, with the exception of Capitec.

The all share was 0.54% lower at 56,852.2 points and the top 40 0.62%. Platinums had lost 2.22%, resources 1.14% and industrials 0.49%.

Diversified miner Glencore was down 6.65% to R59.77, BHP 1.14% to R299.16 and Anglo American 1.12% to R296.44.

Capitec lost 3.38% to R858, amid reports that the Reserve Bank had requested that the National Credit Regulator to investigate loan-origination fees charged by the bank. These fees were the subject of a report by short-seller Viceroy Capital earlier this year.

Naspers fell 1.48% to R3,357.22.

At 9.30am European markets were firmer, with the DAX 30 up 0.9%, the CAC 40 0.7% and the FTSE 100 0.57%.

At the same time gold and platinum were hardly changed, at $1,242.82/oz and $818.38/oz respectively. Brent crude was 0.4% higher at $77.70 a barrel.