MARKET WRAP: JSE is the odd man out as global markets firm on trade talks

The JSE bucked the general optimism in global markets on Thursday with the latter rising on optimism that a global trade war could be averted.

The Dow had risen 0.72% by the JSE’s close amid signs the US and China were open to discussing their trade dispute in high-level negotiations, potentially heading off a global trade war. The FTSE 100 was 0.8% higher and the DAX 30 0.48%.

It was reported earlier that US and Chinese officials were open to resuming high-level trade talks. “The hope is that China and the US will be able to resolve trade matters through bilateral agreements,” said ThinkMarkets analyst Naeem Aslam.

The positive sentiment did not extend to the local market where the release of fair manufacturing and mining data on the day failed to reassure market concerns that GDP in the second quarter could show a contraction.

Together, today’s figures suggest the contraction in SA’s economy slowed in the middle of the second quarter, Capital Economics analysts said. “Even so, GDP probably continued to fall.”

The rand firmed more than 2% to the dollar, from oversold levels, despite cautious emerging-market sentiment that saw the Turkish lira weaken further against the dollar.

The stronger rand failed to lift banking, financial and property stocks but general retailers were supported by a comeback by Steinhoff. The troubled retailer rocketed another 27% to close at R2.87. It has gained 71% for the week so far amid indications a three-year debt standstill could be agreed with creditors within a week.

The latest minutes from the European Central Bank (ECB) held little surprises. The decision to end net asset purchases and extend forward guidance was unanimous among its members, with the easing set to cease by December 2018. This was in line with previous communications, Barclays Research analysts said.

The all share closed 0.67% lower at 56,849.40 points and the top 40 lost 0.73%. The gold index gave up 1.53%, resources 1.45%, property 0.83%, financials 0.47% and industrials 0.42%. General retailers rose 0.39%.

Sasol was down 1.92% to R508.

Naspers firmed 0.14% to R3,444.75.

The rand was at R13.2848 to the dollar from R13.5659. Local bonds were steady with the R186 bid slightly firmer at 8.685%. The US 10-year treasury was at 2.8533% from 2.8469%.

The top 40 Alsi futures index dropped 0.91% to 50,701 points. The number of contracts traded was 17,582 from Wednesday’s 15,797.