MARKET WRAP: JSE suffers worst week in two months

The JSE recorded broad-based losses on Friday, capping its worst week since September.

The week saw an interest-rate increase as well as a small cabinet reshuffle, but a firmer rand and falling oil price helped provide some support for banks and retailers.

The all share fell 0.96% to 50,697.7 points and the top 40 lost 1.02%. Resources fell 2.54%, while food and drug retailers added 0.5%. The all share fell 2.68% in the week.

Earlier, Brent crude slumped about 5% to below $60 a barrel amid increasing concern about slowing economic growth.

The oil market was jittery after US inventories hit their highest level in 11 months, fuelling concern about a global crude glut amid a worsening economic outlook, London Capital Group analyst Jasper Lawler said. “The fact that oil traders shrugged off expectations that Opec will start withholding supply in 2019 to rein in the glut reflects just how concerned oil traders are over the future outlook”.

Global trade was a little muted by Thanksgiving Day in the US, but the local calendar was busy in terms of corporate, political and economic news.

Shortly after the JSE closed the Dow was off 0.44% at 24,358.23 points, while in Europe, the FTSE 100 had lost 0.39%, with the CAC 40 and DAX 30 flat.

Brent crude was 5.12% lower at $59.32 a barrel. Platinum was down 0.45% to $843.28 an ounce and gold 0.26% to $1,223.85.

Sasol plunged 5.2% to R404.32.

Diversified miner Glencore lost 2.84% to R50.35.

PPC slumped 6.15% to R5.95, after reporting earlier 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. But net profit declined 14.5% to R260m, with a 29% decline in profit of cement sales in the rest of Africa and 18% in its home market.

Trade was risk-off on Friday, with investors waiting for a UK-EU Brexit summit on Sunday. EU and UK officials are set to meet to try to settle some outstanding issues, including Spanish concerns about Gibraltar and broader concerns over fishing rights.

Even if a deal is reached, however, UK Prime Minister Theresa May will still need to put it before the UK parliament.

“With her deal being widely criticised by MPs across the political spectrum, be they “leave” voters or remainers, this is not going to be an easy job, although the alternative of a no-deal Brexit may be enough to convince her doubters to side with her and get it over the line,” Oanda analyst Craig Erlam said.

Focus next week will be on producer inflation data and business confidence; however, the release of Naspers’s interim results to end-September could also give the market direction. Compared with its previous results, Naspers expects its headline earnings per share to have risen by between 200% and 207%.

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