MARKET WRAP: JSE closes 2% lower as trade-war fears persist
The JSE closed lower on Monday as global markets took a knock amid an intensifying trade war between the US and China.
US President Donald Trump accused China on Monday of currency manipulation after the yuan weakened below the psychological seven-to-one US dollar level for the first time since 2008 following Trump’s latest tariff threat on China.
Last week, Trump said the US would impose a 10% tariff on $300bn worth of Chinese goods from September 1, after the two parties resumed negotiations in Shanghai. Concerns about the escalating trade war decreased appetite for riskier assets causing the rand to test the R15/$ level in intra-day trade.
Shortly after the JSE closed, the rand had weakened 0.84% to R14.8776/$, 1.51% to R16.6371/€ and 0.85% to R18.0617/£. The euro had strengthened 0.66% to $1.1182.
The benchmark government 10-year bond was weaker, with its yield rising 7.5 basis points or 0.075 percentage points to 8.435%. Bonds yields move inversely to bond prices.
Gold had gained 1.23% to $1,458.32/oz and platinum 0.51% to $849.67. Brent crude was 0.95% lower at $60.64 a barrel.
Shortly after the JSE closed, the Dow had fallen 1.89% to 25,984.75 points. In Europe, the FTSE 100 had lost 2.5%, France’s CAC 40 2.22% and Germany’s DAX 30 1.89%.
Earlier, the Shanghai Composite fell 1.62%, Hong Kong’s Hang Seng 2.85% and Japan’s Nikkei 225 1.74%.
The JSE all share dropped 2.31% to 54,975.40 points, its biggest one-day fall since May 9, and the top 40 2.52%. Industrials fell 3.37% and banks 2.15%.
FirstRand relinquished 2.8% to R59.33, Nedbank 2.33% to R230.12, Standard Bank 1.61% to R171.89 and Absa 1.38% to R154.
MTN gained 0.1% to R111.47. The company said on Monday that its Ghanaian business increased its subscriber base by 6.2% to 21.3-million for the six months ended June.
Quilter fell 1.56% to R24.69 after the financial services company announced on Monday that it will sell its life assurance business to ReAssure for £425m.
SA Corporate Real Estate fell 1.45% to R3.39. The company said earlier that Rory Mackey will stay on as its managing director despite his resignation in May. It also said it had rejected acquisition offers from three companies.
Onelogix gained 0.92% to R3.30 after the logistics company said on Monday that its expects headline earnings per share to increase between 6% to 16% (35.7c to 39.1c) for the year ended May.
Brait gained 4.09% to R13.75 following reports that the investment company may sell its shares in Virgin Active.
Merafe Resources lost 2.48% to R1.18 after the company said its earnings before interest, taxes, depreciation and amortisation decreased by 45% to R435m for the six months ended June.
Hyprop fell 2.41% to R65.97 after the landlord announced the sale of Manda Hill in Zambia. The company owns 50% of the shopping centre, with the other half owned by AttAfrica, in which Hyprop owns a 37.5% stake.
Earlier, Standard Bank reported its whole-economy purchasing managers’ index (PMI) in July dropped to 48.4 index points from 49.7 in June, below the consensus of 49.6, according to a Bloomberg poll.
Source: businesslive.co.za
