MARKET WRAP: Equities rout continues, with banks leading the losses

The JSE dropped in line with world markets on Tuesday, extending losses sustained since Friday to 3.5%.

Risk-off global sentiment due to the ongoing US-China trade conflict was again the dominant theme in markets. The rand reached a six-and-a-half month low against the euro, although rand hedges were mixed.

Miners in general failed to gain significantly from the weaker local currency, as prices of most commodities slipped. Banks and retailers extended their losses, with the former now having given up 9% since Thursday.

Analysts maintain the pace of global economic growth is now under threat from the trade conflict, with global liquidity drying up as investors also react to the tightening of monetary policy in the US and eurozone.

Having been closed on Monday, Asian markets were sharply lower on Tuesday, with the Shanghai Composite dropping 3.78% and the Hang Seng 2.78%.

Naspers ended the day 3.01% lower at R3,210, tracking losses in Hong Kong-listed associate Tencent.

The Dow fell almost 2% shortly after it opened on Tuesday, in its fifth consecutive session of declines.

There were no major corporate or economic releases on the day, although wage negotiations continued at Eskom with threats of further load shedding.

The all share closed 1.72% lower at 56,253.30 points and the top 40 lost 1.93%. Banks lost 2.35%, property 2.13%, industrials 2.1%, food and drug retailers 1.52%, general retailers 1.5%, and financials 1.49%. The gold index rose 0.66%.

Anglo American dropped 1.4% to R306.51.

British American Tobacco gained 1.59% to R669.48 but Richemont shed 2.58% to R121.29.

FirstRand lost 3.48% to R56.88 and Standard Bank 2.19% to R186.

Shoprite relinquished 2.32% to R220.63 and Woolworths 1.47% to R54.33.

Growthpoint lost 3.61% to R25.35.

Vodacom closed 2.8% lower at R130.

At 5.40pm the Dow had lost 1.25% to 24,675.69 points, while in Europe, the DAX 30 had given up 1.11%, the CAC 40 1.02% and the FTSE 100 0.27%.

At the same time, platinum had slumped 2.26% to $864.10 an ounce and gold 0.27% to $1,274.78. Brent crude oil fell 0.82% to $74 a barrel.

The top 40 Alsi futures index lost 1.37% to 50,004 points. The number of contracts traded was 112,740 from Monday’s 73,942, ahead of the quarterly futures close-out on Thursday.