US-China trade war continues to put pressure on JSE

The JSE pushed lower on Friday, amid risk-off trade on global markets, once again driven by fears over the US-China trade war.

An executive order signed by US President Donald Trump  aimed at banning Huawei equipment in the US took effect on Thursday, prompting threats of retaliation from China.

There were also contradictory messages regarding the resumption of US-China trade negotiations, reported Dow Jones Newswires, with a Chinese official saying that negotiations had been “severely hampered” by higher tariffs imposed by the US last week.

The all share avoided the losses of Chinese markets on Friday, but was faring slightly worse than European markets.

At 10am the all share was down 0.69% to 56,149.3 points and the top 40 0.77%. Banks had lost 1.16% and industrials 0.87%.

The Shanghai Composite had fallen 2.48%, while in Europe, the FTSE 100 was down 0.27%, the CAC 40 0.34% and the DAX 30 0.49%.

Gold was flat at $1,285.89/oz while platinum was 0.77% lower at $826.85. Brent crude was flat at $72.78/$, but has risen 2.71% so far this week.

Tension is also escalating between the US and Iran over sanctions imposed regarding the latter’s nuclear deal, bad news for local motorists who will fork out an additional 9c per litre in carbon taxes in June.

The oil price would likely climb in coming months, partially due to structural reasons, as the northern hemisphere heads into summer, said DaMina Advisors senior policy fellow Greg Priddy, It is likely that the market will also come to realise that increased Saudi Arabian production may not be able to offset decreased supplies by sanctions-hit Iran.

“Meanwhile, a significant risk exists of major military escalation in the Persian Gulf,” Priddy said, adding, however, that this was not the most probable scenario.

There was some positive corporate news on Friday, with Aspen Pharmacare jumping 6.33% to R110.81, after saying New Zealand authorities had approved the sale of its nutritionals business there to Lactalis.

Diversified miner Glencore was down 2.11% to R50.04 and Anglo American 0.43% to R356.21.

FirstRand was down 1.13% to R67.20, Standard Bank 1.41% to R197.95 and Absa 1.13% to R167.64.

Naspers had lost 1.88% to R3,311.54.

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