MARKET WRAP: JSE closes slightly higher in cautious trade

The JSE closed higher, albeit unconvincingly, on Thursday, as markets were gripped by renewed concern over an escalating global trade war, and a comeback by the dollar against the euro.

Trading was cautious for most of the day, as investors followed wild swings in the rand, which initially firmed to R14.15 to the dollar before weakening to R14.44. At the JSE’s close it was at R14.3136.

The euro firmed to $1.16 earlier as the US Federal Reserve cautioned against the effects of a growing trade spat. Despite this, the Fed still seems set to hike rates twice this year, which supported the dollar in later trade.

Global market focus is now expected to shift to a meeting of global central bankers in Jackson Hole, Wyoming. US Fed chair Jerome Powell is set to speak on Friday.

The Dow opened slightly weaker amid speculation that US President Donald Trump’s political position could be threatened by his current legal woes and as fresh US-China tariffs took effect, Dow Jones Newswires reported.

The world’s two biggest economies kicked off two days of talks in Washington as the US, on Thursday, placed tariffs on $16bn on Chinese goods on top of the $34bn already targeted. By the end of September, it could add levies on another $200bn, about half of all Chinese imports.

Uninspiring results from Woolworths and Massmart, which were reported on the day, saw their share prices drop, while Shoprite, Mr Price and Pick n Pay ended the day firmer.

Woolworths lost 1.84% to R50.60 and Massmart 0.23% to R110.75. Shoprite rose 2.87% to R215.20, Mr Price 1.07% to R237.27 and Pick n Pay 0.14% to R70.75.

The all share closed 0.14% higher at 58,204.70 points and the top 40 added 0.13%. Food and drug retailers gained 2.62%, platinums 0.65%, industrials 0.56%, financials 0.36% and banks 0.29%. Resources shed 1.12% and property 0.12%.

Impala Platinum rose 1.31% to R16.96 and Lonmin 4.28% to R7.31.

Naspers ended the day 0.32% higher at R3,441.

Financial services group Discovery’s share price jumped as much as 5.2%, the most in two months, after saying it expects earnings per share to increase by between 25% and 30%, to between R8.85 and R8.89, for the year to end-June. The stock closed 3.4% higher at R173. The group’s results will be published on September 4.

Local bonds held up at firmer levels with the benchmark R186 bid at 8.935% after having weakened through 9% last week. The US 10-year treasury was last seen at 2.8216% from 2.8189%.

The top 40 Alsi futures index lost 0.37% to 51,700 points. The number of contracts traded was 22,478 from Wednesday’s 24,925.