MARKET WRAP: JSE closes lower as US politics weigh on global equities

The JSE closed lower on Wednesday, in line with most global markets, as talks of the potential impeachment of US President Donald Trump weighed on investor sentiment.

The summary of a call between US President Donald Trump and Ukrainian president Volodymyr Zelensky revealed that Trump asked for help in investigating former US vice-president Joe Biden and his son. The summary was released by the Trump administration after US House of Representative’s speaker Nancy Pelosi said on Tuesday that it would launch an impeachment inquiry against Trump.

“Everyone is, naturally, now speculating on how Trump responds to the impeachment proceedings but it still seems highly unlikely that the Senate backs it even if the House does. But perhaps that’s not the Democrats ultimate aim, with the proximity to next year’s election not likely a fortunate coincidence,” Craig Erlam, senior market analyst at Oanda, said.

Shortly after the JSE closed, the Dow had added 0.52% to 26,946.54 points. In Europe, the FTSE 100 was down 0.11%, France’s CAC 40 0.92% and Germany’s DAX 30 0.7%.

Earlier, the Shanghai Composite fell 1%, Hong Kong’s Hang Seng 1.28% and Japan’s Nikkei 225 0.36%.

Locally, the government’s total gross loan debt increased to 58.3% of annual GDP as at June 30 2019, data from the Reserve Bank showed on Wednesday. This surpassed the February 2019 budget’s projection of 56.2% for the end of the full 2019/2020 fiscal year. The Bank’s leading business cycle indicator fell 1.5% to 103 points in July, its 10th consecutive decline.

At 5.20pm, the rand had weakened 1.05% to R15.0201/$, 0.41% to to R16.4518/€ and 0.1% to R18.5933/£. The euro had firmed 0.61% to $1.0953. 

The benchmark R186 government bond was weaker, with the yield rising 7.5 basis points to 8.345%. Bond prices move inversely to bond yields.

Gold was down 0.99% to $1,516.19/oz and platinum 2.34% to $933.37. Brent crude lost 0.45% to $62.15 a barrel. 

The JSE all share fell 1.34% to 54,876.80 points and the top 40 1.4%. Banks dropped 2.24% and financials 1.86%.

Pick n Pay closed 3.17% lower at R59.26. The retailer said on Wednesday that its total debt had increased to R17bn from R1.6bn for the 53 weeks ended March 3. The change, however, was as a result of accounting changes and had no material effect on its risk profile. 

Clover climbed 4.75% to R23.59 after the Competition Tribunal approved its acquisition by consortium Milco for R4.8bn.

Nampak dropped 2.21% to R9.29, despite saying earlier that canned beverage sales came in better than expected in the 11 months to end-August. 

Rand Merchant Investment Holdings (RMI) fell 1.09% to R29.84 after the company said on Wednesday that Outsurance has agreed to sell its New Zealand insurance business Youi for up to NZ$13m. RMI is holds 89% of Outsurance.

Sibanye-Stillwater gained 3.63% to R20.83 after the gold miner said on Wednesday that it would cut about 5,270 jobs due to restructuring at its Marikana operations, which it acquired with its purchase of Lonmin.

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