MARKET WRAP: JSE slumps on global growth fears

The JSE was a little lower in broad-based losses on Friday, under pressure from dismal global economic data. The local bourse was, however, firmer for the week.

A 2% slide in the rand helped support some miners, but bad news ensured most stocks on the JSE were lower, while Naspers was largely unaffected by an earlier 3% fall in Tencent, ending the day flat at R2,818.27.

The all share fell 0.36% to 51,560.5 points and the top 40 0.24%. Industrials lost 0.56%, general retailers 2.8% and platinums 1.81%. Resources firmed 0.43% and gold miners 0.28%.

Chinese industrial production growth came in at 5.4% compared to a 5.9% forecast, while retail sales were recorded at 8.1% compared to an expected 8.8%.

France’s purchasing managers’ index fell below 50 points for the first time since 2014, while Germany’s industrial output grew at it slowest rate in four years.

The trade war is clearly having an effect, said BK Asset Management MD Boris Schlossberg. 

Oanda analyst Stephen Innes said: “Investors are right to be worried about global growth as the Chinese economy continues to stutter. The data lends support to the market’s view that things will get worse in China before they get better, despite investment rising.”

Diversified miner Glencore fell 1.45% to R52.37, while Anglo American added 1.35% to R307.56.

Mr Price slumped 3.59% to R230.83, Truworths 5.24% to R84.76, and Woolworths 3.13% to R53.62.

UK Prime Minister Theresa May continues her battle in Brussels, although signs point to frustrated EU officials, who complain  they are being given little direction as to what London wants. May is seeking further concessions from the EU to win over a divided UK Parliament, with pressure building after she survived a no-confidence vote earlier this week, albeit with stiff opposition.

Thin trading conditions are expected to persist next week, which will be shortened, as Monday is a public holiday. All eyes are likely to be on the US Federal Reserve, which is widely expected to raise interest rates by 25 basis points next week; this will be the fourth hike this year.

Trade-war issues and Brexit may also be on the agenda, with some progress made this week as the US and China continue negotiations. China has agreed to resume soybean imports from the US, also agreeing to lower tariffs on US automobile imports.

Shortly after the JSE closed, platinum had fallen 1.13% to $787.01 an ounce and gold 0.56% to $1,234.50. Brent crude was 0.92% lower at $61.06 a barrel.

At the same time, the Dow was off 0.84% to 24,289.41 points, while in Europe, the FTSE 100 had lost 0.27%, the CAC 40 0.6% and the DAX 30 0.32%.

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