MARKET WRAP: JSE slips in broad-based losses as Fed turns hawkish

The JSE fell on Thursday, bringing its cumulative losses for the week so far to 2.5% as risk-off trade on global markets continues.

Indications the US Federal Reserve will continue with interest rate increases, or even increase their pace in 2019, dulled market appetite.

Local banks and general retailers fared the worst, while market heavyweight Naspers continued to push lower, falling 1.17% to R2,724.94.

The all share fell 0.49% to 52,132.6 points and the top 40 lost 0.49%. General retailers were 1.47% down and industrials fell 0.81%. Gold miners gained 0.71%.

Local data was downbeat, with mining production falling 9.1% year on year in August, worse than the Trading Economics consensus forecast of a 4.4% drop. This represents the worst month for the sector for more than two years.

Although disappointing, recent manufacturing and retail data was more positive, indicating that SA escaped recession in the third quarter, said Capital Economics senior emerging market economist John Ashbourne. Even if this was the case, performance as a whole for the year will remain poor.

Global focus was on Brexit negotiations, and ongoing tensions over the disappearance of a Saudi Arabian journalist. The pound was earlier under some strain, after a senior European Union official indicated that the bloc may agree to an additional 12-month extension to trade negotiations.

Brent crude, however, remained below $80 a barrel, recently coming under pressure from signs of robust US shale oil production and rising US inventory data.

Sasol gave back 1.9% to R509.90, having earlier revised its guidance downwards for coal-to-oil production at its Secunda operations, now only expecting to match 2017 production.

Rand hedge AB InBev rose 0.83% to R1,201.84 and British American Tobacco 0.31% to R617.40, while Richemont lost 0.52% to R102.79.

Mr Price fell 2.47% to R224.46 and TFG 3% to R158.99.

Steinhoff International lifted 7.46% to R2.16. On Wednesday, Dutch investors’ association VEB agreed to suspend its class action against the embattled retailer.

Pick n Pay rose 0.09% to R64.50. Its CEO, Stuart Bird, will leave the group at the end of the year.

Spar rose 2.5% to R176.89.

Vodacom fell 1.22% to R122.75.

Mediclinic slumped 7.8% to R68.19, extending Wednesday’s 16.9% plunge, which followed its warning of an 8% earnings decline for the six months to end-September.

Datatec lost 0.21% to R23.95. earlier reporting that group revenue rose 8.7% to $2bn in the six months to end-August.

Shortly after the JSE closed the Dow was 0.22% lower at 25,651.31 points, while in Europe, the FTSE 100 had gained 0.18% and the CAC 40 0.23%, while the DAX 30 had fallen 0.21%.

At the same time, platinum was 0.42% lower at $828.98 an ounce while gold had added 0.19% to $1,224.34. Brent crude was 1.05% lower at $79.43 a barrel.

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