JSE flat as banks gain on positive inflation data while property stocks fall
US and Chinese markets are up despite China’s retaliation to the latest US trade tariffs
The JSE all share was flat on Wednesday morning as rand hedges retreated on a firmer rand. Global markets have shrugged off US President Donald Trump’s latest round of higher tariffs against China.
Property stocks were under pressure in early trade, with Growthpoint falling 4.03% to R23.08 on reports that it underpayed for land on the Cape Town Foreshore.
Earlier, SBG Securities noted that Growthpoint generated about R145m in income from "nonrecurring sources" to deliver 6.5% dividend growth for the year to end-June. If this were excluded, dividend growth would have been 4%.
Property market value leader Nepi Rockcastle lost 3.39% to R131.55.
Naspers gained 0.49% to R3,195.37 as Tencent firmed more than 2% in Hong Kong trade.
Banks and general retailers gained on positive inflation data, lessening the likelihood that the SA Reserve Bank would hike rates 25 basis points on Thursday, at the conclusion of its monetary policy committee (MPC) meeting.
The consumer price index (CPI) rose 4.9% in August, lower than the previous month’s 5.1% and an expected 5.2%.
"The inflation data strengthens our conviction that policy makers at the Reserve Bank will keep the key interest rate on hold at their meeting tomorrow," analysts at Capital Economics said.
Absa led banks at the opening, gaining 1.09% to R148.60, followed by Standard Bank firming 1.07% to R176.48. Among retailers, Woolworths rose 0.68% to R50.50 and Pepkor Holdings 1.15% to R16.69.
The Dow closed 0.71% higher on Tuesday, despite China retaliating to the latest US trade tariffs by imposing duties on $60bn worth of US goods, effective from September 24.
Dow Jones Newswires reported that the expectation was for Trump to issue a formal statement over the next few days directing US trade representative Robert Lighthizer to begin the process of crafting the next tranche of tariffs. If fully implemented, those tariffs would cover virtually all imports of Chinese goods, which totalled $505bn in 2017.
At 10.06am the all share was 0.06% lower at 56,350 points and the top 40 dropped 0.15%. Property was down 1.08% and industrials 0.37%.
Platinums rose 1.08%, banks 0.62% and general retailers 0.26%.