JSE opens lower as growth concerns spook market

The JSE opened on the back foot on Tuesday as global growth concerns reared their head, strengthening the dollar and driving the rand lower.

At 9.51am the all share was 0.83% lower at 55,328 points and the top 40 had lost 0.92%. General retailers lost 1.9%, banks 1.73%, food and drug retailers 1.55% and industrials 1.5%. The gold index lifted 2.2%, platinums 1.77% and resources 1.13%.

International Monetary Fund (IMF) MD Christine Lagarde raised alarm bells about the health of the global economy, saying international growth may have plateaued, Dow Jones Newswires reported.

"For most countries, it has become more difficult to deliver on the promise of greater prosperity, because the global economic weather is beginning to change," Lagarde said in a speech in Washington on Monday.

Lagarde said the IMF's official economic forecasts, which will be released next week, have "become less bright" and that factors identified merely as risks earlier in 2018 had begun to materialise.

Adding fuel to the fire, Brent crude rose above $84 a barrel, raising the spectre of higher inflation as the US Federal Reserve is set to hike interest rates further.

However, with growth in the US at 4%, that country remains an attractive alternative to a lower GDP performer in emerging markets, which could hit China particularly hard.

The Dow closed 0.73% up on Monday, basking in the aftermath of the trade agreement reached between the US and Canada. The Hang Seng retreated 2.45% with Tencent losing more than 2% on Tuesday.

This had an immediate effect on Naspers, which owns a third of Tencent, with the local heavyweight tumbling to below R3,000 a share, before recovering marginally.

It was last 2.13% lower at R3,001.93.

The banking index weakened as the rand lost ground to R14.35 to the dollar after earlier seemingly set to break through the R14 level.

Property stocks were in turmoil, with the index slipping to just above 500 points, a level last seen in April 2014, following the shock announcement that Hyprop CEO Pieter Prinsloo had resigned.

Hyprop said Prinsloo and his family were emigrating. At the same time MAS Real Estate announced that Morne Wilken, its CEO, would relocate back to SA to become CEO of Hyprop.

Hyprop was down 1.95% to R90.04. MAS lost 1.4% to R22.51.

Sasol benefited from the higher oil prices, rising 1.21% to R557.18.

In the gold sector, Sibanye-Stillwater rocketed 7.3% to R9.56.

FirstRand retreated 1.94% to R65.21 and Standard Bank 1.71% to R171.52.

Among financials MMI Holdings dropped 2.29% to R17.04.

Netcare dropped 2.9% to R23.11 after earlier warning the market of a more subdued performance for the year to end-September.

mittnerm@businesslive.co.za