MARKET WRAP: JSE begins third quarter on sour note

The JSE fell on Monday, beginning the new month and quarter on a negative note, in line with a subdued mood on global markets.

Losses were initially broad-based, but banks and retailers firmed towards the close, despite the weaker rand.

Diversified miners and Naspers were under the most pressure, following sharp losses on Asian bourses, partly due to disappointing economic data out of China.

The all share fell 0.78% to 57,159.6 points and the top 40 1.04%. Platinums gained 2.2%, general retailers 1.17% and banks 0.65%. Resources lost 1.84%.

Rising trade-war concerns and poor economic data out of Europe, Asia and SA on the day all contributed to the risk-off environment, although the primary focus was on developments in Germany and the US.

German chancellor Angela Merkel will hold last-ditch talks to try to save her coalition government on Monday evening, while investors are currently bracing for a new round of international tariffs.

Locally, there were further signs of depressed confidence in the first half of the year and that economic activity did not pick up as fast as hoped.

The Absa purchasing managers index for June printed at a three-month low of 47.9 index points.

“Although second quarter results so far have been disappointing, we are forecasting a small rebound in growth for this year, commencing in the third quarter, which should boost demand moderately in the second half of the year,” said Investec economist Lara Hodes.

Markets were also on the receiving end of news that the petrol price would rise by between 23c and 26c a litre on Wednesday, putting further pressure on consumers and, by extension, those companies which are primarily reliant on local economic conditions.

Diversified miner Glencore gave up 2.91% to R64.03, BHP 2.62% to R302.61 and Anglo American 2.48% to R299.80.

Sasol gave up 1.36% to R496.

Pallinghurst was flat at R2.50, after saying earlier its emerald mine in Ethiopia had been overrun by a mob of 300 to 500 people. Local authorities were in the process of regaining control of the mine.

Steinhoff International gained 6.2% to R1.37, despite reporting on Friday that it had been forced to write down €12.8bn in assets due to accounting irregularities and previous misstatements, about twice that previously communicated to the market.

Naspers was down 2.22% to R3,407.73.

At 5.30pm the Dow was off 0.43% to 24,166.48 points, while in Europe the FTSE 100 had fallen 0.93%, the CAC 40 0.88% and the DAX 30 0.31%.

At the same time platinum had fallen 1.71% to $835.92 an ounce and gold 0.49% to $1,246.27. Brent crude was 1.65% lower at $77.79 a barrel.

The top 40 Alsi futures index fell 0.49% to 51,435 points. The number of contracts traded was 24,212 from Friday’s 27,901.