MARKET WRAP: JSE slips in risk-off trade as Naspers leads losses

The JSE closed lower on Monday as global markets reacted to US President Donald Trump’s threat to increase tariffs on Chinese imports, sparking the worst day for the Shanghai Composite in more than three years.

Industrials fared worst on the local bourse, with Naspers falling 3.31% to R3,599.01, after Trump issued the threat ahead of Wednesday’s trade talks with China. But analysts have said the move was likely to just be a negotiating tactic, and that a deal could still be imminent.

Markets have, however, been heavily pricing in a trade deal, and if talks completely fall apart, there could be significant pressure on US stocks, Oanda analyst Edward Moya said.

There was serious pressure on European and Asian markets, with the Shanghai Composite falling 5.58% and the Hang Seng almost 3% earlier in the day.

Despite pressure on the local market, a recovering oil price and news that the Chinese would proceed with trade talks this week helped support local retailers and some miners.

Property stocks also fared well, led by Redefine, which added 2.53% to R10.15. It earlier upped its interim distribution 4% to 49.19c per share.

The all share fell 1.05% to 58,712.8 points and the top 40 lost 1.31%. Industrials fell 1.54% and banks 1.48%. Platinums added 1.31% and property stocks 0.97%.

Shortly after the JSE closed, gold was flat at $1,279.47/oz while platinum was up 0.79% to $869.64. Brent crude was flat at $70.78 a barrel.

At the same time the Dow was down 1.01% to 26,234.52 points, while in Europe, the CAC 40 had lost 1.43% and the DAX 30 1.41%.

Domestic focus remains on Wednesday’s national polls, the results of which could determine the extent to which President Cyril Ramaphosa will be able to pursue his pro-growth and market-pleasing policies.

Domestic markets had priced in much of the bad news, but the election may not provide clear answers, said Old Mutual Investment’s stable growth fund manager John Orford. While it may give some indication as to Ramaphosa’s support, it is less likely to give a clear idea of the balance of power between Ramaphosa and the populist faction within the ANC, he said.

Mining and manufacturing data for March are due on Thursday. The figures will be closely watched amid concern about SA’s economic performance in the first quarter. The effect of load-shedding on these energy-intensive sectors has been a primary concern.

Diversified miner Glencore fell 2.18% to R55.22, Anglo American 1.35% to R369.47 and BHP 1.09% to R333.42.

Sasol had dropped 1.15% to R454.70. 

Rand hedge Richemont gave up 1.06% to R103.66.

Massmart fell 3.3% to R91.14, It said earlier that its CEO, Guy Hayward, would step down before the end of 2019.

Ascendis Health gained 4.95% to R5.30, adding to its 12.22% rise on Friday, when it announced changes to its board. It also said on Thursday that it would sell three businesses within its Biosciences division to a consortium for R480m.

[email protected]

[email protected]