MARKET WRAP: JSE slips on trade war risks

A risk-off tone in global markets weighed on the JSE on Tuesday, with banks and financials benefiting from a stable rand, while miners were under pressure.

Comments by US President Donald Trump that he expected to levy additional tariffs on China has soured the mood on global markets, with investors watching a meeting between Trump and his Chinese counterpart, Xi Jinping, at a Group of 20 (G20) summit later this week.

The all share closed 0.65% lower at 51,354 points and the top 40 0.76%. General retailers added 0.76%. Platinums fell 2.26%, resources 1.34% and industrials 0.78%.

The week had started off slightly positively, with markets welcoming a draft Brexit deal at the weekend and signs the Italian government was willing to climb down on its demands to increase its budget deficit.

Earlier, the Rand Merchant Bank (RMB) and University of Stellenbosch’s bureau for economic research business confidence index fell to 31 points in the fourth quarter from 34 in the third. Sentiment declined in two of the five sectors, with RMB saying on Tuesday if it had not been for disappointing new vehicle sales, confidence would have edged higher.

Global headwinds were, however, mounting and domestic inflation and policy interest rates had bottoms, said Ettienne Le Roux, chief economist at RMB.

Policy uncertainty was likely to increase ahead of the 2019 polls, said Investec chief economist Annabel Bishop. “Indeed, extreme left-wing political rhetoric has ramped up ahead of the 2019 general elections, and is likely to be further amplified, likely further undermining business confidence, and so growth prospects,” she said.

The oil price was also in focus, after data indicated oil production in Saudi Arabia reached a record high in November. The figures come ahead of a meeting of oil-cartel Opec next week, which could see production-cut pledges.

Diversified miner Anglo American fell 1.82% to R272.97, BHP 1.38% to R264.95 and Glencore 1.67% to R50.04.

Nampak fell 6.69% to R14.51, after earlier reporting group revenue fell 1% to R17.3bn in the year to end-September, although profit rose 19% to R1.5bn and headline earnings per share 15% to 168.7c.

Naspers fell 1.14% to R2,790.

PPC slumped 7.83% to R5.30, The cement-maker had slumped 6.15% on Friday, when it reported that overall group revenue grew 8% to R5.6bn in the six months to end-September from R5.2bn in the matching period in 2017.

Shortly after the JSE closed gold and platinum were flat at $1,221.12 and $843.76 an ounce respectively. Brent crude was 0.5% higher at $60.80 a barrel.

At the same time, the Dow was off 0.74%, while in Europe, the FTSE 100 had fallen 0.58%, the CAC 40 0.66% and the DAX 30 0.64%.

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