Picture: REUTERS
Picture: REUTERS

The JSE closed slightly weaker on Friday as emerging-market contagion kept investors on the sidelines in thin trade.

Banks slumped more than 3% while gold stocks jumped more than 4% on the day. Volumes at the close were just more than R13bn as many investors took a long weekend after the Women’s Day public holiday on Thursday.

Trading was dominated by the weak rand, falling 3% at one point to an annual low of R14.15 to the dollar after a sharp retreat in the Turkish lira.

The lira shed 20% in intraday trade after US President Donald Trump tweeted that the US would double tariffs on Turkish steel and aluminium.

Umkhulu Consulting analyst Adam Phillips said there was a real danger that further weakness in the lira could wipe out the Turkish banking system.

"We have seen a massive movement in the Turkish currency, falling 70% this year," he said.

Phillips said Turkish President Recep Tayyip Erdogan had few options: he might consider sitting the crisis out, hiking interest rates or implementing exchange-control measures. "None were likely to work over the short term," he said.

Erdogan said he would prevail in economic warfare and called on his people to convert their dollars and "gold under the pillow" to lira, in response to the shock that had sent his country’s currency spiralling to record lows, the Financial Times reported.

In a speech on Friday, Erdogan said Turks "will respond to those who start economic war against" the country, describing the current market malaise as "a national struggle". His speech echoed the tone struck on Thursday, when Erdogan told supporters that "if they have dollars, we have our people, our righteousness and our God".

The European Central Bank (ECB) expressed concern about the effects of the weaker currency on Turkish banks and is set to examine the Turkish exposure of several European banks, including Spain’s BBVA, Italy’s UniCredit and France’s BNP Paribas.

The Dow was 0.87% lower at the JSE’s close, despite the latest round of corporate earnings reports offering some support to shares.

The FTSE traded under pressure for most of the day as concern about a no-deal Brexit grew. Earlier, the pound fell to $1.2778, the weakest level so far in 2018 against the greenback.

The euro was at $1.1435 from $1.1527, the lowest level for the common currency in a year.

Brent crude recovered 1.26% to $72.87 a barrel in late trade.

The all share closed 0.14% lower at 57,703 points and the top 40 lost 0.07%. Banks lost 3.5%, financials 2.13%, general retailers 1.99% and property 1.19%. The gold index rose 4.45%, resources 1.56% and platinums 1.09%.

The index ended the week 1.02% higher, the best performance in three weeks.

BHP rose 2.01% to R303.54.

Sasol climbed 1.34% to R527.49.

Among the rand hedges British American Tobacco firmed 2.87% to R743.81.

AngloGold Ashanti rose 6% to R120.48 and Sibanye-Stillwater 2.97% to R8.66.

Standard Bank shed 4.01% to R188.04 and FirstRand 3.68% to R65.35.

Sanlam was down 3.11% to R74.13.

Shoprite lost 2.94% to R212.33 and Woolworths 2.61% to R50.06.

Hammerson gained 2.43% to R90.78, but Fortress B slipped 1.7% to R15.63 among property stocks.

Naspers added 0.59% to R3,371.49.