MARKET WRAP: JSE closes weaker on risk-off sentiment ahead of Trump-Juncker meeting

The JSE closed lower on Wednesday amid general scepticism that the meeting between US President Donald Trump and European Commission President Jean-Claude Juncker would reduce global trade tension.

Market optimism that was evident on Tuesday following the granting of loans by China to a number of South African companies, evaporated on Wednesday as international developments dominated sentiment in low-volume trade.

The Dow lost 0.31% at the JSE’s close. European markets were in the red, with the FTSE 100 down 0.79%.

Markets were hoping for at least a truce regarding the trade tension, but even greater barriers from the Trump administration could ensue, affecting Europe as a whole, analysts said.

Trump has imposed tariffs on imports of European steel and aluminium and threatened new ones on cars. “The meeting could be decisive for broader risk sentiment,” said XM investment analyst Andreas Georgiou in a note.

European car maker stocks are likely to be in the eye of the storm, in the light of US threats for tariffs on EU car imports, if the talks fail to bear fruit, he said.

The all share ended the day 1.17% lower at 56,387.90 points and the top 40 lost 1.31%. Industrials lost 1.6%, general retailers 0.98%, property 0.93%, resources 0.84%, food and drug retailers 0.75% and banks 0.62%. The gold index recovered 0.48%.

Sasol rose 0.98% to R509.30.

Nepi Rockcastle shed 1.69% to R116.50.

Naspers lost 3.21% to R3,310.13.

The rand held up well for most of the day at an average of R13.22 to the dollar amid choppy trade in the euro, ranging from $1.672 to $1.1712.

The euro was supported by buoyant sentiment on upbeat German data, with the Ifo business climate index edging slightly lower but still showing resilience in the face of probable greater trade tension. The market is now eyeing the release of US second-quarter GDP on Friday,

Brent crude fell in late trade to just above $73 a barrel after starting the day on a positive note.

Local bonds were strong performers with the R186 bid at 8.625% from 8.72%. The US 10-year treasury was last seen at 2.9398% from 2.95%.

The top 40 Alsi futures index lost 1.39% to 50,374 points. The number of contracts traded was 16,577 from Tuesday’s 18,531.