MARKET WRAP: JSE closes slightly weaker as market eyes key events

The JSE closed slightly weaker on Monday in subdued trade as the market failed to find direction ahead of a number of important risk events later in the week.

These include meetings of the US Federal Reserve, the European Central Bank (ECB) and the Bank of Japan which will impact markets globally. The Fed is expected to hike interest rates by 25 basis points on Wednesday.

The market was keeping an eye on the summit between US President Donald Trump and North Korean leader Kim Jong-un in Singapore, which is also like to impact financial markets.

Higher yielding currencies such as the rand, peso and ruble were strongly reliant on investor appetite taking on risk, said FXTM analyst Jameel Ahmad. It would be expected that currencies like the rand would follow the lead from global stock markets, if they do rally on indications of a positive summit, he said.

Analysts said markets were in risk-off mode on the day, with the Dow opening flat at the JSE’s close. European markets were more upbeat as the euro clawed back some lost ground to trade above $1.18.

Data was light, but weaker-than-expected manufacturing numbers for the UK earlier put the pound under pressure.

The all share closed 0.13% lower at 58,146.10 points and the top 40 lost 0.09%. The platinum index lost 0.92%, banks 0.76%, property 0.66%, financials 0.56% and food and drug retailers 0.5%. Resources added 0.36% and general retailers 0.32%.

Anheuser-Busch InBev rose 2.73% to R1,270.85.

Alexander Forbes dropped 5.76% to R5.73 after annual results failed to impress the market with headline earnings per share dropping 16.8%.

Capitec lost 2.05% to R865.95.

The rand traded in a narrow range for most of the day. The local currency momentarily broke through R13 to the dollar, but could not hold on the firmer levels and was at R13.0924 at the JSE’s close.

Local bonds were under pressure with the benchmark R186 yield hitting 9%. It was at 8.99% from 8.95% at the JSE’s close.

Foreigners were net sellers of local bonds last week, shedding R15.8bn in local debt, according to the JSE’s weekly data.

The benchmark US 10-year was largely unchanged at 2.9566% while the German 10-year bund yield jumped to 0.4889% from 0.4464%.

The top 40 Alsi futures index added 0.18% to 51,988 points. The number of contracts traded was 14,497 from Friday’s 25,464.