MARKET WRAP: JSE closes lower as markets await US Fed chair comments

The JSE closed lower on Thursday, tracking most global markets as investors remained cautious ahead of US Federal Reserve chair Jerome Powell’s speech at the Jackson Hole economic symposium on Friday.

Investors will closely monitor what Powell says as the markets await any hints that the Fed may cut rates further in 2019. Meeting minutes released on Wednesday downplayed expectations that the Fed will begin a monetary policy easing cycle. The markets have already partially priced in at least two more cuts in 2019.

“Investors refuse to accept that more rate cuts aren’t coming,” Oanda senior market analyst Craig Erlam said. “If Powell disappoints on Friday, I will be shocked if the recession indicator doesn’t flash red again, a punishment from the markets for the Fed not doing as its told. So does Powell concede defeat, or accept responsibility for recession fears mounting, even if the cause of it doesn’t lie with him?”

Shortly after the JSE closed, the rand had weakened 0.1% to R15.2021/$, 0.13% to R16.8569/€, and 1.17% to R18.63/£. The euro was flat at $1.1088. Gold was down 0.12% at $1,500/oz while  platinum added 0.79% to $860.70. Brent crude lost 0.73% to $59.94 a barrel.

The Dow was flat at 26,191.54 points. In Europe, the FTSE 100 had lost 1.26%, France’s CAC 40 0.95%, and Germany’s DAX 30 0.64%. Earlier, the Shanghai Composite rose 0.11% while Hong Kong’s Hang Seng fell 0.84%, and Japan’s Nikkei 225 was flat.

The JSE all share fell 0.82% to 54,187.90 points and the top 40 0.82%. Banks lost 1.31% and general retailers 4.57%. 

Mr Price slumped 13.7% to R151.46 after the retailer said on Thursday that its total retail sales grew 0.5% in the first four months of its new financial year. 

Truworths fell 3.41% to R51.60, Woolworths 3.27% to R51.75, and TFG 2.63% to R144.74.

Italtile jumped 8% to R13.50 after the tile manufacturer said its trading profit increased 18% to R1.7bn in the year to end-June. 

Old Mutual fell 0.16% to R18.28. On Thursday, it issued a further notice of termination to axed CEO Peter Moyo, who is fighting the matter in court. The insurer also said its headline earnings  fell by between 33% and 36% for the six months to end-June.

Among diversified miners, Anglo American fell 2.09% to R311, Glencore 1.46% to R42.27, and BHP 0.35% to R315.04.

Exxaro fell 0.3% to R134.05. This was despite it saying earlier that its headline earnings per share grew 42% to R17.30 in the six months to end-June.

South32 slumped 7.67% to R26.73 after it said on Thursday that its ordinary dividend per share decreased by 25% to 7.9c for the year to end-June. 

Gold Fields fell 1.55% to R87.04 after it said it will sell its 9.9% stake in Australia’s Gold Road Resources for at least R1.3bn. 

Omnia dropped 5.07% to R35.03 after its CEO Adriaan de Lange resigned on Wednesday. 

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Source: businesslive.co.za