MARKET WRAP: JSE lower as gold miners have their worst day in four years

Gold miners slumped on Tuesday as global risk appetite improved on news that the US will lift some tariffs on Chinese goods, easing concerns that global growth will continue to be affected by the dispute.

The US and China have agreed to resume talks in two weeks, while the US has pushed back the implementation of a 10% tariff on some Chinese goods, including cellphones and laptops, until December 15.

The rand was volatile, reversing earlier losses to trade 0.75% firmer at R15.181/$ as the JSE closed.

Local gold miners slumped 8.98%, but are still up 12.4% so far in August and almost 68% in 2019. Tuesday was the worst day for local gold miners since August 25 2015. Both the sector and the price of the metal have been running hard recently, and were due for a correction, said Wayne McCurrie, a portfolio manager at FirstRand’s FNB wealth and investment unit.

The all share fell 0.32% to 55,1920 points and the top 40 0.13%. Platinums lost 3.98% and the resources index 1.41%. Banks added 0.67%.

Shortly after the JSE closed, gold was down 0.45% to $1,504.21/oz and platinum 0.41% to $854.42, while Brent crude had jumped 3.52%to $60.54 a barrel.

The Dow leapt 1.55% to 26,298.11 points, while in Europe, the FTSE 100 had gained 0.39%, the CAC 40 1.35%, and the DAX 30 0.86%.

Political protests in Hong Kong and the prospect of the return of populist governments in Italy and Argentina weighed on risk assets on Tuesday, with the local bourse earlier dipping below 55,000 points.

Flights to Hong Kong have been cancelled due to ongoing pro-democracy protests, ignited by a contentious extradition treaty to China, while Italy looks set for fresh elections amid a seemingly imminent collapse of that country’s coalition government.

Argentina is also in the headlines, with the peso slumping 14% on Monday, following an electoral defeat for pro-austerity President Mauricio Macri.

The primary issue weighing on sentiment is Hong Kong, however, said BK Asset Management MD Boris Schlossberg in a note. “The uprising … is reaching a breaking point and there is growing concern that it becomes a geopolitical nightmare if China decides to use force against the city, creating both a humanitarian and political conflict that could have global consequences.”

Naspers added 1.44% to R3,492.45.

Sibanye slumped 10.79% to R19.09, Gold Fields 10.1% to R84.28, and Harmony 7.96% to R43.

Rand hedge British American Tobacco gave back 2.49% to R554.23 and AB InBev 2.09% to R1,454.47.

Transpaco was unchanged at R17. It said earlier that it expects its headline earnings per share, as well as its earnings per share, to fall by 40%-45%, to between 179.04c and 164.34c, for the full-year ended June.

Steinhoff International slipped 3.88% to R1.24. It earlier gave a lengthy investor presentation in which it said that after months of forensic investigations into past dealings, it is seeking to move forward to restructure its capital and deal with the threat of shareholder litigation.

Discovery fell 3.19% to R102.35, extending Monday’s 8.44% slump. The government is pressing ahead with the implementation of the National Health Insurance (NHI) fund, raising questions about the future of medical schemes and private-sector healthcare.

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