JSE opens weaker in choppy trade as Trump questions Fed’s actions

The JSE opened weaker on Tuesday in cautious trade as the US appeared set on implementing higher tariffs against China, while President Donald Trump has questioned further interest-rate hikes by the US Federal Reserve.

The market digested a slew of company results, including BHP, Imperial Holdings, Harmony and Shoprite.

The dollar weakened in response to Trump’s comments, with the euro firming to $1.1542. This provided some support to the rand, strengthening to R14.3565 to the dollar from R14.5261.

The Dow closed 0.35% higher on Monday. Asian markets were marginally up on Tuesday with the Nikkei 225 rising 0.09% and the Hang Seng 0.35%.

Local gold miners recovered strongly on the weaker dollar, with banks, financials and property stocks benefiting from the stronger rand.

Dow Jones Newswires reported that the Trump administration is moving closer this week to levying tariffs on almost half of China’s imports despite broad opposition from US businesses and the start of a fresh round of talks between the two countries to settle the trade dispute.

At the same time, Trump said he was unhappy with the Fed’s recent moves to increase interest rates and raised doubts about the man he placed in charge of the institution, Jerome Powell, the newswire said.

Trump said his advisers told him in 2017 that Powell would support “cheap money” as the Fed’s chair, and then Powell surprised him by embracing rate increases, which the president fears will cool off the fast-growing economy.

The president’s growing discontent could become a precursor to clashes between the White House and the central bank as the Fed proceeds with long-planned increases in short-term rates, the newswire said.

At 9.26am the all share was 0.26% lower at 56,996.40 points and the top 40 dropped 0.34%. Food and drug retailers lost 1.71%, resources 1.41% and industrials 0.14%. The gold index rose 2.95%, banks 0.84%, property 0.74% and general retailers 0.7%.

BHP was 2.75% lower at R298.62. Underlying attributable profit rose 33% to $8.9bn in the year to end-June, the group reported.

Richemont slipped 1.93% to R123.44.

Imperial Holdings gained 1.6% to R201.50. Annual revenue to end-June was up 11% to R128,7bn and operating profit rose 6% to R6.4bn.

Gold producer Harmony jumped 2.36% to R21.67. Results for the year to end-June came in at the higher end of expectations, with an 8% increase in underground recovered grade.

Shoprite dropped 5.86% to R199.38 as diluted headline earnings per share (HEPS) dropped 3.8% for the year to July 1.

Nepi Rockcastle added 0.74% to R126.48.

Naspers added 0.79% to R3,273.50.

Adcock Ingram rose 2.23% to R66.35. It said in a trading update that HEPS for the full year to end-June were likely to be between 21.6% and 24.8% higher.