MARKET WRAP: JSE drops for a second day amid continuing trade-war uncertainty

The JSE all share closed lower for a second consecutive day on Wednesday as investors await the start of trade negotiations between the US and China on Thursday, with some analysts sceptical that the two countries will make progress this week.

Officials from the world’s two biggest economies are expected to meet in Washington, while news reports this week have dimmed expectations that the superpowers will reach a deal at the end of the week. 

“The escalating trade war rhetoric and tit-for-tat actions between the US and China have cast doubts on there being any constructive outcome at the upcoming talks,” TreasuryONE senior currency dealer Andre Botha said. “This has caused markets to become jittery as the upcoming trade talks will certainly start off on the back foot, and the situation will be monitored closely as this could cause a shift in sentiment at the drop of a hat.” 

Reuters reported that China is considering tighter visa restrictions for US citizens linked to anti-China groups, while the US blacklisted 28 Chinese companies earlier this week over the country’s treatment of predominately Muslim ethnic minorities. 

Locally, the SA Chamber of Commerce and Industry’s (Sacci) business confidence index (BCI) rose to 92.4 index points in September from a 34 year-low of 89.1 points in August. The latest figure is above the median forecast of 89 points, according to a Bloomberg survey.

Shortly after the JSE closed, the Dow was up 0.45% to 26,289.24 points. In Europe, the FTSE 100 had added 0.21%, France’s CAC 40 0.66%, and Germany’s DAX 30 0.97%. Earlier, the Shanghai Composite rose 0.39%, while Hong Kong’s Hang Seng fell 0.81% and Japan’s Nikkei 225 0.61%. 

The rand was firmer for most of the day, reaching an intra-day best of R15.13/$. At 5.20pm, it had firmed 0.53% to R15.1988/$, 0.3% to R16.6921/€ and 0.5% to R18.5815/£. The euro was up 0.24% to $1.0982.

Gold added 0.17% to $1,507.97/oz and platinum 0.21% to $892.74. Brent crude was up 1.34% to $58.9 a barrel. 

The JSE all share fell 0.35% to 54,339.5 points and the top 40 0.32%. Gold miners rose 2.72% while industrials fell 0.65%. 

Old Mutual fell 1.88% to R19.79. The insurer filed papers in the Johannesburg High Court on Tuesday saying it was not in contempt of court by preventing axed CEO Peter Moyo from returning to work.

Adcorp dropped 4.32% to R15.50. The labour broker said on Wednesday that its CEO Innocent Dutiro has resigned and its  CFO Cheryl-Jane Kujenga will serve as its interim CEO.

Newpark said on Wednesday that its headline earnings per share decreased by 55% to 18.48c in the six months to end-August. Its share price was unchanged at R5.

Statistics SA is set to release mining and manufacturing production for August on Thursday. Bloomberg’s median forecast is for mining to have shown little or no growth after increasing 2.4% in July, while manufacturing could have contracted by 1.5%, from a fall of 1.1% previously.

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