The JSE posted sharp and broad-based losses on Thursday morning, in line with global markets, with investors wary about escalating trade conflict between the US and China.
US President Donald Trump has threatened to levy additional tariffs on Chinese imports on Friday, saying the world’s second-largest economy “broke the deal” even as negotiations continue on Thursday.
Asian and European markets were down sharply on Thursday morning, although there is still some optimism that a deal between the US and China will be reached in coming days.
Amid broad-based losses, diversified miners fared worst on the JSE, weighed down by a sharp drop in oil prices.
At 10am the all share was down 1.59% to 57,119.9 points and the top 40 had lost 1.73%. Resources fell 2.08%, food and drug retailers 1.93%, and banks 1.85%.
Gold was up 0.33% to $1,284.86/oz, while platinum lost 0.56% to $857.24. Brent crude was down 0.77% to $69.66 a barrel.
Markets were pricing in the limited risk of talks breaking down, although the news flow remained confusing, said SPI Asset Management’s Stephen Innes. “Markets are still very much on the fence whether this week’s trade developments are just hardball tactic from Trump or the start of an authentic threat to the global growth narrative.”
Locally, all eyes are on the elections as investors wait to see whether the ANC has received a sizable majority. The ANC’s performance will be watched amid uncertainty regarding the ability of President Cyril Ramaphosa to push ahead with his pro-growth and anti-corruption agenda.
The election result in Gauteng is also grabbing attention, due to the possibility that a coalition government will need to be formed in SA’s economic heartland.
Local data will also grab some attention, with mining and manufacturing data for March due at 11.30am. The data will provide some insight into SA’s economic performance in the first quarter.
There has also been a spate of local corporate releases, including from Steinhoff, which fell 16.41% to R1.68. The embattled retailer reported on Tuesday night that it suffered a net loss of €4.03bn in the 12 months to end-September 2017.
MTN gave up 1.57% to R101.83, having earlier reported a mixed performance across its African operations in the first quarter to end-March.
Diversified miner Glencore gave up 2.98% to R52.76, Anglo American 2.54% to R357.02 and BHP 1.93% to R325.92.
Sasol lost 1.72% to R441.01.
Rand hedge Richemont was 1.33% lower at R99.99 and AB InBev 1.2% to R1,211.84.
FirstRand gave up 2.57% to R67.01 and Absa 2.37% to R163.17.
Mr Price fell 2.29% to R212.02.
Naspers gave back 1.43% to R3,492.82.