The JSE closed weaker on Wednesday as investors sought safe-haven investments following renewed concern about a trade war between China and the US and as the Turkish lira continued to retreat.
Global bond yields fell and the yen gained, as investors steered clear of risky assets. European markets followed in the footsteps of softer Asian markets, while the Dow was 0.40% lower at the JSE’s close.
Global mining stocks were lower led by platinums on a lower metal price, as oil prices also lost momentum.
Brent crude dropped 1.4% to $78.36 a barrel amid reports that oil cartel Opec may ease supply curbs in June, with oil-and-gas companies leading declines in Europe and Asia.
Analysts and investors also said they were closely watching developments on global trade, pointing to uncertainty over an agreement with China over telecom giant ZTE, Dow Jones Newswires reported.
Industrial stocks on Wall Street, which rallied earlier in the week on news the US would suspend efforts to apply tariffs on $150bn in Chinese imports, helped lead the declines in the US, the newswires said.
Analysts said the Turkish lira could soon hit an historic low of 5 to the dollar, with possible contagion extending to other emerging markets.
“We should not underestimate the impact that happenings in Turkey and Argentina could have on general emerging-market sentiment,” said FXTM analyst Jameel Ahmad.
Marginally better local consumer inflation data released on the day provided some support for the rand at the close, ahead of the Reserve Bank interest-rate decision on Thursday. But investors remained cautious on the expected unchanged rate decision.
The consumer price index (CPI) rose 4.5% year on year in April, from 3.8% year on year in March.
The dollar rebounded on the day ahead of the release of expected hawkish minutes from the US Federal Reserve’s last meeting from May 1-2, due on Wednesday evening SA time.
The all share closed 1.86% lower at 57,043.40 points and the top 40 lost 1.93%. The platinum index shed 6.6%, resources 3.69%, the gold index 3.01%, food and drug retailers 2.08%, property 1.61% and general retailers 1.53%.
Anglo American plummeted 5.6% to R306.72.
Sasol closed 4.64% off at R461.80.
Reinet was 0.64% up at R234.50. It announced earlier that its net asset value dropped 14.6% to €5.1bn in the year to end-March, as the value of its investment in British American Tobacco (BAT) took a knock.
BAT slipped 0.14% to R636.
Anglo American Platinum plummeted 7.52% to R335 and Impala Platinum 6.98% to R19.58.
FirstRand shed 1.8% to R60.50.
Steinhoff Africa Retail gained 2.22% to R17.50 after it said it had successfully paid back R16bn in shareholder loans.
MTN dropped 3.07% to R114.
Naspers lost 0.47% to R3,180 and Sappi 3.6% to R85.74.
The top 40 Alsi futures index lost 1.90% to 50,918 points. The number of contracts traded was 23,304 from Tuesday’s 18,502.