MARKET WRAP: JSE closes lower as the all share falls 0.61%

The JSE closed lower on Thursday, with platinum miners and banks faring worst. 

The prolonged US-China trade war continues to drive sentiment in global markets, with a meeting set to take place between the two countries at the G20 summit this weekend. Markets are  closely monitoring the events leading up to the meeting amid uncertainty that the two economic superpowers will put an end to their dispute. 

The Chinese government said on Thursday that the US needs to lift sanctions against Chinese telecoms company Huawei, which was blacklisted from the US market last month. 

Despite expressing optimism that a trade deal could be reached, US President Donald Trump has also said the US could add more tariffs against China if the two countries are unable to find common ground.

Expectations of the possible truce boosted the rand, which reached a best level of R14.13/$ in intra-day trade. At 5.20pm, the rand had strengthened 0.47% to R14.1588/$, 0.49% to R16.0945/€, and 0.58% to R17.9402/£. The euro was flat $1,1367. 

The benchmark R186 government bond was stronger, with the yield falling four basis points to 8.11%. Bond yields move inversely to bond prices.

Gold fell 0.23% to $1,405.64/oz after breaking its winning streak on Wednesday. It is, however, still on track for its best month in three years. Platinum was down 0.97% to $808.61. Brent crude had gained 0.27% to $66.38 a barrel, boosted by growing tension between Iran and the US.

At the close of the JSE, the Dow was little changed at 26,536.82 points. In Europe, the FTSE 100 and France’s CAC 40 were flat, while Germany’s DAX 30 had gained 0.37%.

In Asia, the Shanghai Composite gained 0.69%, Hong Kong’s Hang Seng 1.42% and Japan’s Nikkei 1.19%.

The JSE all share fell 0.61% to 58,066.70 points and the top 40 0.67%. Platinum miners dropped 1.72% and banks 1.03%, while the gold index gained 1.27%.

Anglo American Platinum slumped 4.18% to R824.18.

Standard Bank lost 1.88% to R198.21, Absa 1.45% to R176.39, and Nedbank 0.77% to R252.32.

Spur fell 1.74% to R22 after Grand Parade Investments said it plans to sell its 10% stake in the food franchise back to Spur for R260.4m.

Blue Label Telecoms slumped 9.66% to R4.58 after the debt of its investee, Cell C, was downgraded by S&P Global Ratings for the second time in three months.

Murray & Roberts climbed 5.79% to R14.44, after earlier reaching its best level since November in intra-day trade. The company said on Thursday that the takeover bid by Germany’s Aton had been extended yet again because of delays in getting approvals from competition authorities.

Producer inflation for May moderated to 6.4% year-on-year from 6.5% in April, Statistics SA said on Thursday, in line with analyst expectations according to a Bloomberg consensus. The Reserve Bank released the first quarterly bulletin for 2019, which showed that real, gross fixed capital outlays by private business enterprises receded 9.8% from the previous quarter.

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