MARKET WRAP: JSE weakens as global sentiment sours

The JSE fell on Wednesday, with platinum miners faring worst, as risk appetite abated amid yet another sign the US-China trade war is far from over.

US President Donald Trump threatened new import tariffs on Chinese goods on Tuesday, saying the country had failed to live up to a pledge to increase purchases of US farm products.

US retail sales numbers for June also weighed on emerging markets, with the consensus-beating data slightly reducing market expectations of a 50-basis-point (bps) cut by the US Federal Reserve later in July.

Asian and European markets were under pressure, with US markets retreating further from record highs set earlier in the week.

The JSE all share fell 0.72% to 57,636 points and the top 40 0.76%. Banks lost 1.98% and platinums 3.69%.

The Dow was down 0.22% to 27,275.76 points, while in Europe, the FTSE 100 had fallen 0.43%, the CAC 40 0.59%, and the DAX 30 0.71%.

Shortly after the JSE closed gold was up 1.02% to $1,420.02/oz and platinum 1.01% to $846.61. Brent crude was 0.12% lower at $64.22 a barrel.

Statistics SA earlier reported retail sales grew 2.2% year-on-year in May, beating the Bloomberg consensus for a rise of 1.7%. The figures confirm that the economy is set to record growth in the second quarter following a contraction in the first, as consumer spending accounts for about 60% of GDP, said Nedbank Group Economic Unit analysts. “However, the general economic environment remains subdued.”

Naspers fell 1.47% to R3,442.72.

Impala Platinum slumped 5.83% to R70.10. It earlier offered bondholders the ability to redeem its $250m convertible bond due in 2022, seeking to use a cash windfall from good recent platinum prices to reduce high interest payments on the bond.

EOH fell 3.38% to R20, extending Tuesday’s 0.77% loss. It said then that an investigation into its past dealings with the government uncovered “suspicious transactions” worth R1.2bn.