JSE opens lower on renewed risk-off sentiment after Trump’s trade tweets

The JSE opened weaker on Wednesday on renewed global risk-off sentiment, following Tuesday’s recovery on signs that a trade war between China and the US had been averted.

But this may have been premature. Despite China’s stating that it would cut the import tariff charged to car manufacturers to 15%, US President Donald Trump tweeted that he was not happy with the trade negotiations so far.

He also said that there was a “substantial chance” that the summit with North Korea in June “would not work out”.

“Markets traded lower overnight as risk sentiment was dealt a blow by Trump’s tweets,” FxPro analysts said.

The Dow closed 0.72% lower while Asian markets were weaker on Wednesday. The Nikkei 225 lost 1.18% and the Hang Seng 1.52%.

At the same time, Trump was weighing up measures to cut EU steel and aluminium exports to the US by about 10%, in a sign the bloc’s concessions to secure tariff exemptions were not meeting White House demands, EU officials familiar with the talks said.

Dow Jones Newswires reported the EU was still trying to figure out precisely what Trump wanted ahead of his June 1 deadline, when the bloc’s temporary exemptions would expire, European officials said.

Brent crude was weaker at $78.34 a barrel as the dollar turned around, recording renewed gains against the euro from a softer patch on Tuesday.

Local consumer inflation data released at 10am had little effect on banks and retailers, despite coming in better than expected. April’s consumer price index (CPI) rose 4.5% from 3.8%, slightly better than the expected 4.7%.

At 10.04am the all share was 0.84% weaker at 57,635.40 points and the top 40 dropped 0.92%. Resources shed 1.6%, property 1.55%, food and drug retailers 1.4% and banks 1.32%.

Anglo American was 2.7% lower at R316.14.

Reinet was 0.92% up at R235.15 after announcing 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 gained 0.99% to R643.20.

FirstRand shed 1.79% to R60.51 and Standard Bank 1.54% to R201.90.

Steinhoff International tumbled 5.36% to R1.59.

Among retail stocks Redefine dropped 4.61% to R10.96.

Telkom slipped 1.6% to R53.37.

Naspers was up 0.16% to R3,200.

Sappi fell 1.95% to R87.21.