MARKET WRAP: JSE closes lower with miners leading losses

The JSE closed lower on Tuesday with miners leading losses,  while global markets await more developments on Brexit. 

UK members of parliament are currently debating the Withdrawal Agreement Bill that they will vote on in the coming days. Law makers voted against UK Prime Minister Boris Johnson’s Brexit deal in a narrow defeat at the weekend, forcing him to request an extension of the Brexit deadline. 

“It seems odds-on that a deal will pass tonight, however, the fact that October 31 is only a week away will probably necessitate an extension being requested to scrutinise all the litigation that such a plan will entail,” said TreasuryONE senior dealer Andre Botha. 

The rand strengthened to its best level in more than a month in intra-day trade on Tuesday bolstered by optimism in the US-China trade talks.

Chinese vice-foreign minister Le Yucheng said on Tuesday that the two countries have made some progress in their trade negotiations. Reuters reported on Tuesday that China has offered 10-million tonnes of tariff-free quota to major Chinese and international soybean crushers to import soybeans from the US.

At 5.56pm, the rand had firmed 1.01% to R14.6104/$, 1.09% to R16.2752/€ and 1.12% to R18.9152/£. The euro had weakened 0.11% to $1.114.

Gold was flat at $1,484.71/oz while platinum added 0.29% to $890.39. Brent crude was 1.12% higher at $59.70 a barrel. 

The Dow was up 0.15% to 26,856.30 points. In Europe, the FTSE 100 had gained 0.68% and Germany’s DAX 30 0.12%, while France’s CAC 40 was flat.

Earlier, the Shanghai Composite rose 0.5% and Hong Kong’s Hang Seng 0.23%, while Japan’s Nikkei 225 was closed for a public holiday. 

Locally, the leading business indicator fell to 103.8 in August from 103.9 in July, data from the Reserve Bank showed on Tuesday. The median forecast was for the indicator to have fallen to 103.7, according to Bloomberg. 

“SA is likely seeing its business cycle begin to trough and, while this may prove a fairly patchy and lengthy experience, the business cycle should eventually begin to notably turn up in SA, absent a marked further slowdown in global economic activity, and clearly also barring a global recession,” Investec economist Annabel Bishop said. 

The JSE all share fell 0.31% to 55,936.80 points and the top 40 0.45%. Gold miners dropped 3.46%, the platinum mining index 2.92% and resources 2.16%.

Standard Bank rose 0.86% to R181.34. The company said earlier that it has written down its stake in the Industrial and Commercial Bank of China joint venture by R2.4bn, citing deteriorating market conditions.

Pick n Pay jumped 10.54% to R67.98, it’s highest level in early four months. The retailer said on Tuesday that its trading profit increased 12.5% to R1.187bn in the 26 weeks to end-September.

Anglo American fell 1.03% to R369.72, despite the diversified mining company reporting a 4% increase in output in the third quarter, thanks to the ramp-up at Minas-Rio and strong performance at its metallurgical coal division.

Ascendis Health dropped 4.31% R4.44. The company warned on Tuesday that it expected a headline loss from continuing operations of between R475m and R495m in the year to end-June.

Statistics SA is expected to release the consumer price index for September on Wednesday. Bloomberg’s median forecast is for consumer inflation to have remained unchanged from 4.3% in August.

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