MARKET WRAP: JSE follows weaker global markets on myriad concerns

The JSE all share was lower on Monday as international factors weighed on global investor sentiment.

European bourses had a difficult day following the release of a slew of disappointing economic data for the region, with Germany’s latest purchasing managers’ index (PMI) chief among these concerns.

Germany’s manufacturing PMI dropped to its worst level in 10 years in September, with that of the eurozone as a whole falling to a six-year low, sparking fears of a recession.

Trade uncertainty between the US and China remain on investors’ radars, while tension in the Middle East is also exacting its pound of flesh.

Shortly after the JSE’s close, Germany’s DAX 30 was down 1.18% and France’s CAC 40 1.19%, with both on track for their biggest one-day loss in about five weeks. The FTSE 100 was 0.2% lower, while in the US, the Dow had relinquished 0.15%.

FXTM analyst Jameel Ahmad said Germany’s manufacturing PMI was in contractionary territory for the eighth month in a row. The most recent data out of Europe will scream for further monetary stimulus from the European Central Bank (ECB) although there is awareness that the bank is stretched in this respect, he said. With ECB rates already in negative territory, “there is limited reason to believe that extending rates further into negative territory is the answer to the eurozone’s problems after being held in negative territory for a five-year stretch”.

The JSE all share fell 1.39% on Monday, its biggest drop in almost a week, with the top 40 down 1.55%. Industrials slumped 1.9%, with financials and banks losing 1.12% and and 0.91%, respectively. In what could comfortably be considered safe-haven trade, the gold index added 4.17% and platinums 2.07%.

Harmony led gains in the gold sector, up 3.1% to R48.54, with Sibanye-Stillwater adding 5.68% to R20.10, Gold Fields 4.39% to R78.01, and AngloGold Ashanti 3.18% to R305.64.

Brent crude was last seen off its highest levels of the day, having risen earlier on concern over whether Saudi Arabia can restore the production it lost due to drone attacks on some of its facilities on September 14. It reached the day’s high of $65.30 a barrel, before falling to $64.27 by about 6pm, down about half a percent.

At the same time, spot gold had gained 0.39% to $1,522.87/oz and platinum 0.52% to $954.93. This brings their respective gains for 2019 to more than 18% and 20%.

Glencore fared worst of the large diversified miners, down 2.99% to R46.02, followed by BHP’s fall of 2.01% to R325.97, and Anglo American’s 1.66% to R345.78.

Sasol fell 3.02% to R277.

Investment holding company Brait said earlier that it is in talks with its major shareholder, Titan, which holds 46% of its stock, as it plans to materially cut its debt, through raising equity and recapitalisation, among other ways. The share gained 8% to R17.15, its biggest gain in more than six weeks.

After beginning the day weaker, the rand turned positive in afternoon trade. At 6.15pm it had gained 0.16% to R14.8772/$, 0.42% to R16.3499/€, and 0.5% to R18,4844/£. The euro had weakened 0.28% to $1.0988.

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