JSE set for sharp declines on Monday as trade tensions bite

The JSE could start the new week in the red, with Naspers’s main investment sliding amid protests in Hong Kong and BHP Group falling sharply in Australia as markets fret about US-China trade tensions.

Asian markets were sharply lower on Monday, continuing a sell-off sparked late last week when US President Donald Trump all but dashed hopes for a resolution to the trade war with China.

“Aftershocks from President Trump’s Thursday afternoon Twitter announcement of 10% tariffs on the remaining $300bn of Chinese imports, effective September 1, continued to be felt on Friday — and are set to the dominate the global economic and financial landscape in coming weeks and months,” said Ray Attrill, head of foreign exchange strategy at National Australia Bank. 

Bloomberg reported on Monday that the Chinese government had responded to Trump’s move by asking state-owned enterprises to stop buying US agricultural products.

Hong Kong’s Hang Seng Index was 2.9% down on Monday as pro-democracy protests in the Chinese special administrative region brought public transport networks to a standstill.

The Shanghai Composite lost 0.9% and Japan’s Nikkei 225 slid 2.3%. Korea’s Kospi shed 2.2% and Australia’s main benchmark 1.8%.

Chinese internet and gaming giant Tencent plunged 3.8% in Hong Kong, while JSE-listed miner BHP Group fell 3% in Australia.

“Commodity markets continue to feel the fall-out from the tariff news as speculative longs bail out on reduced global growth and Chinese demand prospects,” Attrill said, citing lower iron ore, copper and coal prices.