JSE falls towards 57,000 points as trade war heats up

The JSE fell on Wednesday, amid a general sell-off of emerging-market equities, although a falling oil price provided some relief for interest rate-sensitive shares.

Losses were broad-based, with local news also somewhat downbeat on the day. Earlier, a monthly index of banking transactions showed a decline of 1.9% in the second quarter, its worst performance since 2013.

The all share fell 1.37% to 57,231 points and the top 40 1.45%. Resources lost 1.67%, financials 1.35% and general retailers 1.29%.

The local bourse reached an intraday low of 57,010 points, before paring losses.

The rand was 1% weaker against the dollar during the course of the day, after US President Donald Trump threatened to slap an additional $200bn in tariffs on Chinese goods.

Despite the sharp sell-off, markets were relatively calm, likely due to the fact it was just a proposal, said BK Asset Management MD Boris Schlossberg.

“The new proposed list of tariffs won’t take effect for another two months; hopefully this escalation can be halted before then,” said Vestact analysts.

The oil price, however, fell about 2% on the day, due to the tariffs as well as news that oil exports from Libya had resumed.

Wage negotiations at Eskom also continue, threatening electricity supply. Unions at the power utility have demanded a meeting with Finance Minister Nhlanhla Nene, as they press their demand for an 8% wage increase.

Diversified miner Glencore fell 3.78% to R56.05, after saying earlier it had established a board committee to respond to a US probe into possible corruption and money laundering at its subsidiaries.

Rand hedge Richemont lost 1.45% to R113.05, while Anheuser-Busch InBev edged 0.58% higher to R1,393.83.

Sanlam gave back 3.27% to R67.99.

Newly rebranded Absa lost 2% to R162.

Naspers fell 1.6% to R3,440.

Gold Brands was flat at 13c, after earlier announcing it had sold its Black Steer burger chain for R3.2m.

Steinhoff International jumped 20.86% to R2.26, after the retailer said it had launched a consent process for a lock-up agreement regarding the restructuring of its debt.

Shortly after the JSE closed the Dow had lost 0.62% to 24,764.86 points, while in Europe, the DAX 30 had fallen 1.4%, the CAC 40 1.39% and the FTSE 100 1.11%.

At the same time, platinum had lost 1.05% to $834.60 an ounce and gold 0.65% to $1,247.26. Brent crude was 2.49% lower at $76.95 a barrel.