MARKET WRAP: JSE closes lower as focus shifts to US Fed interest-rate decision

The JSE closed lower on Wednesday as investors await the US Federal Reserve’s interest-rate decision, with the expectation that the central bank will ease monetary policy amid concern over a slowdown in global economic growth.

The markets appear to have priced in the likelihood of a rate cut ahead of the Fed’s meeting on Wednesday. The probability of a 25-basis-point cut was at 79.1% according to the CME Group FedWatch tool on Wednesday evening. Investors are awaiting more direction from the Fed regarding the trajectory of US monetary policy in the coming months amid speculation that the Fed will cut rates further.

Shortly after the JSE closed, the Dow was flat at 27,212.03 points. In Europe, the FTSE 100 had fallen 0.74% while France’s CAC 40 had gained 0.38%, and Germany’s DAX 30 0.47%.

Earlier, Shanghai’s Composite fell 0.67%, Hong Kong’s Hang Seng 1.31%  and Japan’s Nikkei 225 0.86%.

Locally, the country recorded a trade surplus of R4.42bn in June compared to the downward  revision of R1.7bn in May and slightly above analyst expectations of R4.2bn, according to a Bloomberg poll.

The National Treasury said on Wednesday that it would increase the size of its weekly bond auctions to fund Eskom and the anticipated tax-revenue shortfall. The Eskom bailout of R59bn has been labelled as credit-negative by Moody’s Investors Service, which is the only major global ratings agency that has not placed SA below investment grade. 

At 5.55pm, the rand had firmed 0.34% to R14.1615/$ and 0.58% to R15.7588/€, but had weakened 0.18% to R17.2996/£. The euro was 0.25% lower at $1.1128. 

Gold had fallen 0.21% to $1,427.76/oz while platinum gained 0.77% to $876.60. Brent crude was flat at $64.90 a barrel.  

The JSE all share fell 0.8% to 56,784.60 points and the top 40 0.8%. Gold miners were down 4.45% and resources 1.05%. 

AngloGold Ashanti dropped 5.37% to R253.82, Gold Fields 4.53% to R76.04, and Sibanye-Stillwater 3.85% to R18.22.

Ascendis Health said on Wednesday that it is considering selling its two remaining businesses in its bio-sciences division, Avima and Klub M5. Its shares were unchanged at R5.

Intu Properties slumped 30.64% to R8.40, reaching a record low in intra-day trade after the company said on Wednesday that it may require more funding from shareholders to cut its debt. The share is down more than 60% in 2019 and worth just a fraction of the record high it reached in 2015, at R75.50.

Pick n Pay gained 0.56% to R66.56 after the retailer said on Wednesday that it had appointed Lerena Olivier as its CFO and executive director. Olivier has served as a senior executive in the company’s financial division for eight years.

Glencore fell 1.51% to R46.26 after the diversified miner said earlier that its copper output for the first half of the year was 5% lower at 33,200 tonnes compared with the same period in 2018.

Standard Bank fell 0.71% to R179.55. The company said on Wednesday that it will only fund coal-fired power projects if they meet specific emissions and size criteria.

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Source: businesslive.co.za