MARKET WRAP: JSE slips as investors shy away from risk assets

The JSE slipped on Tuesday, in its third-consecutive session of losses, as global equity markets continued to feel the pinch from geopolitical risk.

Local miners were firmer, with gold miners once again in favour, amid rising tension in the Middle East and concern over the US-China trade war.

The White House levied additional sanctions on Iran on Monday evening, targeting the country’s leadership, prompting Tehran to rule out any diplomatic solution to their ongoing dispute.

Gold extended its gains, reaching a six-year high, benefiting local producers and the rand. Banks and retailers, however, were again under pressure.

As the JSE closed the rand was 0.44% firmer at a R14.3057/$. A higher gold price tends to benefit the rand, as it is a key earner of foreign exchange for SA.

The all share fell 0.7% to 58,343.2 points and the top 40 0.91%. Industrials lost 1.3%, general retailers 1.54%, and banks 1.04%. Platinums jumped 5.14% and gold miners 1.19%.

Shortly after the JSE closed the Dow was flat at 26,727.54 points, but the tech-heavy Nasdaq was down 0.58%. In Europe, the FTSE 100 and CAC 40 were flat, while the DAX 30 was down 0.38%.

Gold was up 0.79% to $1,430.55/oz while platinum had lost 0.37% to $813.49. Brent crude rose 0.4% to $65.08 a barrel.

Local domestic data earlier was somewhat positive, with the SA Reserve Bank’s leading business indicator rising 0.7% to 105.5 points in April, beating Bloomberg’s expectations of 104.9 points.

Statistics SA’s quarterly employment statistics also beat expectations, growing 0.8% year-on-year in the first quarter, while consensus had been for 0.5% growth. The data indicated, however, that businesses are slashing part-time jobs as well as overtime and bonus payments. Businesses paid 36% less in bonuses and overtime in the first quarter compared to the prior three-month period.

Omnia jumped 11.79% to R38.39, despite it saying earlier that although revenue rose 7% in the year to end-March, operating profit fell 98% and the company swung into a loss of R414m for the year.

Stefanutti Stocks fell 28% to 36c, its worst one-day drop since it listed in 2007. The company has lost 90% so far in 2019.

Raubex fell 4.1% to R18.69.

Conditions in the construction sector in the second-quarter of 2019 improved a little, with the FNB/BER civil construction index gaining one point, following the all-time low of 10 registered in the first quarter of 2019, FNB said earlier. The data indicated, however, that close to 90% of managers in the sector are dissatisfied with conditions.

The index showed that the slowdown in the sector is likely to intensify, said FNB property economist Siphamandla Mkhwanazi.

Anglo American Platinum gained 5.5% to R862.45, having said earlier that earnings in the six months to end-June will leap by at least 80% thanks to higher platinum-group metals (PGM) prices in rand terms. The gain in its share price was the biggest in a single day since December 3 2018.

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