MARKET WRAP: JSE ends choppy week lower on global trade concerns

The JSE ended a choppy week of trade in the red on Friday, as banks and general retailers retreated in risk-off trade with miners gaining on a weaker rand.

Media reports that Beijing would offer the administration of President Donald Trump a package of trade concessions, including increased purchases of American goods, initially helped support market sentiment, Dow Jones Newswires reported.

Comments from Trump, however, saying China and other countries had become “very spoiled” raised concerns of more protracted negotiations on a trade deal, analysts said.

“We see a negotiated solution ultimately, but it’s going to be a slow process,” Shane Oliver, head of investment strategy at AMP Capital, wrote in a note.

The risk is high that the tariffs or at least some of them could start up for a short period until there is a trade deal, which would not go down well with markets in the weeks ahead, he said.

Brent crude was 0.25% softer at $79.282 a barrel.

The all share closed 0.65% lower at 57,804.30 points and the top 40 dropped 0.74%. Banks lost 1.95%, the platinum index 1.89%, general retailers 1.8% and industrials 1.07%. Resources gained 0.68%.

The all share ended the week 1.06% lower.

Liberty Two Degrees jumped 5.56% to R7.60 after announcing it intended converting its structure to that of a real estate investment trust (Reit).

Murray & Roberts rose 4.03% to R16.01 after announcing it was making a takeover offer for Aveng, which lost 1.1% to 90c.

Naspers shed 0.07% to R3,201.65.

The rand had a torrid day, before recovering marginally near the JSE’s close. The local currency weakened to within striking distance of R13 to the dollar, as the latter flexed its muscle against a basket of currencies, both in emerging and developed markets.

It was at R12.7121 to the dollar soon after the JSE’s close after weakening to R12.818 in the day.

Local bonds weakened in tandem with the currency, with the R186 bid at 8.645% from 8.5%. The US 10-year was at 3.0762% from 3.1122%.

The rise in the yield on the US 10-year treasury to a seven-year high set the scene for another bout of emerging-market weakness, made worse by jitters surrounding the ongoing trade talks between China and the US as well as turmoil in Turkish markets.

The top 40 Alsi futures index fell 0.79% to 51,700 points. The number of contracts traded was 18,978 from Thursday’s 14,950.