JSE opens flat as market expects Tuesday’s GDP data to be disappointing

The JSE opened flat on Tuesday, as investors took a cautious stance ahead of the release of GDP data for the first quarter later in the morning.

“We estimate growth to have contracted by a quarterly 0.1% from 3.1% in the fourth quarter of 2017, weighed down by a decline in mining and manufacturing output as well as weaker retail sales and wholesale trade,” Rand Merchant Bank (RMB) analyst Mpho Tsebe said in a morning note.

Forecasts for the period range between -2% and 2%. “Notwithstanding this, the outlook for 2018 annual growth remains positive,” she said.

US markets closed firmer on Monday, with the Nasdaq hitting a new high as the positive momentum from Friday’s upbeat US jobs data continued. The Dow ended the day 0.72% higher, while Asian markets were firmer on Tuesday, but in slightly more subdued trade than in the previous session.

The Nikkei 225 added 0.28% and the Hang Seng 0.18%.

The rand was stable at about R12.56 to the dollar, as rand hedges and miners rose in anticipation of a weaker local currency following the release of the GDP data. Banks and retailers trended weaker.

Globally, the possibility of escalating trade wars remain a worrying factor.

FXTM analyst Jameel Ahmad said the only explanation for the lack of negative reaction so far was that investors believe US President Donald Trump would back away after extracting better deals from his trading partners.

“However, nothing was guaranteed, and the risk of a tit-for-tat tariff spat converting to a full-blown trade war had increased significantly,” he said.

At 9.58am the all share was 0.08% up at 57,915.20 points and the top 40 lifted 0.21%. Resources rose 0.48% and industrials 0.28%. The platinum index dropped 1.29%, financials 0.58%, banks 0.74% and general retailers 0.29%.

Anglo American gained 0.48% to R311.04.

Sasol added 0.63% to R482.47. Brent crude was up 0.31% to $75.59 a barrel.

Anheuser-Busch InBev added 0.85% to R1,224.37, bringing gains for June to 3.4%. It is still 10.8% lower for the year.

Impala Platinum shed 2.2% to R19.96.

Standard Bank shed 0.66% to R215.19.

Murray & Roberts lost 3.54% to R18.51.

Delta Property Fund was 0.64% lower at R6.20 after announcing on Monday it would shrink its dividend in the present financial year.

Naspers rose 1.17% to R3,306.95.