JSE is lower as markets await Chinese response to higher Trump tariffs

The JSE opened weaker on Tuesday after US President Donald Trump announced tariffs of 10% on $200bn worth of Chinese imports, with markets now eyeing China’s response.

Naspers was down 1.45% to R3,160 on a flat Tencent share price in Hong Kong, as investors reacted lukewarmly to the news it would separately list video entertainment subsidiary MultiChoice.

Naspers shareholders have been clamouring for the separate listing of their interest of Tencent, but management has denied it is planning for such an event.

The Dow closed 0.35% lower on Monday but Chinese markets bounced back on Tuesday as most of the news had already been priced into the market. The Shanghai Composite was up 1.82% and the Hang Seng 0.6%.

TreasuryOne senior currency dealer Andre Botha said there was no knee-jerk reaction this time in the market on the escalated global trade war, with the rand remaining steady at about R14.90 to the dollar.

“The lack of reaction could mean that the market will trade in ranges as we await the response from China,” he said.

Chinese officials earlier threatened to walk away from further talks with the US. Analysts reckon China will be the most affected should it implement retaliatory measures.

But FXTM analyst Hussein Sayed said China still had other weapons it could use. “These include boycotting US products, increasing taxes on earnings of US companies in China and refusing to grant approvals for merger and acquisitions (M&A) involving US businesses.”

China might also reduce its US debt holdings, mostly held in US treasuries, he said.

At 9.41am the all share was 0.22% lower at 56,176.70 points and the top 40 lost 0.31%. The gold index shed 2.04%, industrials 0.54% and property 0.25%. Banks rose 0.7%, platinums 0.62% and financials 0.33%.

Sasol dropped 1.39% to R558.15 on a softer Brent crude price.

British American Tobacco lost 1.21% to R708.02.

Standard Bank recovered 1.13% to R173.94.

Growthpoint showed muted movement to a SBG Securities report that it was inflating income from sources other than rental income to pay out higher dividends to investors. It slipped 0.21% to R23.93.

Nepi Rockcastle retreated 1.65% to R133.78.