MARKET WRAP: JSE closes weaker on concern about US growth policies
As Trump’s is mired in controversy, confidence in his promised financial and infrastructure reforms is fading; European markets also head down
After a positive opening, the JSE turned negative in risk-off trade by the close amid growing concern that US President Donald Trump’s fiscal and growth policies were in jeopardy after he abolished the Manufacturing Council, and Strategy and Policy Forum.
Market confidence in Trump’s economic policies have boosted US equity markets so far in 2017 with the Dow Jones up more than 10%. However, his planned tax and infrastructure spending programmes have not materialised, as he becomes bogged down in continued controversy surrounding his Twitter-based presidency.
Rumours at the close were that Gary Cohn was set to resign as director of the national economic council, creating further turmoil in Trump’s economic team.
The Dow was down 0.52% at the JSE’s close. European markets were also lower with the FTSE 100 having lost 0.59%.
Trading on the JSE was mixed for most of the day, with banks giving back earlier gains. General retailers recovered, with gold shares also rising.
The all share closed 0.21% lower at 55,415.30 points and the blue-chip top 40 dropped 0.30%. Banks shed 0.54%, financials 0.49%, resources 0.19%, and industrials 0.13%. The gold index rose 2.07%, general retailers 1.52%, and the platinum index 0.94%.
Standard Bank ended the day 1.06% lower at R162.13 after reporting headline earnings rose 12% to R12.1bn in the six months to end-June.
Gold Fields jumped 4.71% to R54.48 on positive interim numbers, while PPC rocketed 9.17% to R3.81 on an upbeat trading update.
Retailer Truworths was up 4.53% to R79.86 and Massmart 5.82% to R117.
Property group Emira closed 0.92% lower at R14.05 following a 2% drop in its annual dividend.
The rand was steady at R13.1720, from R13.1781, in choppy trade as it struggled to find direction for most of the day, on a volatile dollar.
South African bonds were firmer after the dollar rebounded against the euro as the July European Central Bank minutes indicated some unease with the stronger trend in the euro.
The R186 was bid at 8.51% from 8.53%. The yield on the 10-year US bond was at 2.2184% from 2.2246%.
The top-40 Alsi futures index was 0.15% lower at 49‚048 points. The number of contracts traded was 20,277 from Wednesday’s 21‚846.