JSE slumps 2% after Donald Trump’s tariff threat

The JSE weakened sharply in broad-based losses on Monday morning, as a bout of risk-aversion over US-China trade talks struck global markets 

US President Donald Trump has threatened to levy additional tariffs on China, despite recent signs that the two countries were closing in on a new trade deal. The rand weakened on Sunday.

In terms of equities, market heavyweight Naspers was faring worst on Monday morning, slumping 3.56% to R3,590.

The Shanghai Composite earlier plunged 5.58%, while the Hang Seng had lost 3.01%.

At 10am the all share was down 1.92% and the top 40 2.11%. Industrials were down 2.39% and food and drug retailers 1.9%. Gold miners had added 0.14%, benefiting from investor interest in safe-haven assets.

Gold was up 0.25% to $1,282.03/oz and platinum 0.48% to $867.02. Brent crude was 1.89% down to R69.46 a barrel.

Market focus is on US-China trade developments, as reports have suggested the Chinese would pull out of talks scheduled for this week.

It was just as likely that Trump was posturing ahead of the talks, as not, and a trade deal could be signed this week, said Vestact analysts.

Local focus is squarely on Wednesday’s national polls, the results of which could determine the extent to which President Cyril Ramaphosa will be able to pursue his pro-growth and market-pleasing policies.

Mining and manufacturing data for March are also due on Thursday.

On Monday morning diversified miner Glencore had lost 2.3% to R55.15, Anglo American 1.99% to R367.04 and BHP 1.93% to R330.59.

Sasol had dropped 1.87% to R451.42.

Rand hedge Richemont had given up 2.19% to R102.48, AB InBev 1.56% to R1,254.18 and British American Tobacco 1.1% to R540.70.

Absa slipped 2.38% to R168.89.

Massmart was down 1.74% to R92.61. It said earlier that its CEO, Guy Hayward, would step down before the end of 2019.

Redefine was up 0.3% to R9.93. It said earlier that it upped its distribution for the six months to end-February 4% to 4919c per share, compared to the prior comparative period.

Ascendis Health was down 7.92% to R4.65, giving up some of its 12.22% gain on Friday, when it announced changes to its board. It also said on Thursday that it would sell three businesses within its Biosciences division to a consortium for R480m.

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