MARKET WRAP: JSE closes at lowest level this year as market awaits Nene decision
The finance minister may lose his job, while emerging markets remain under pressure amid plummeting Chinese stocks
The JSE all share closed at its lowest level this year on Monday, amid uncertainty about the future of finance minister Nhlanhla Nene, who reportedly earlier offered to stand down.
It was also reported earlier that the presidency had not received Nene’s offer.
The rand fell almost as far as R15 to the dollar as pressure mounted on Nene to quit after he admitted to meeting the controversial Gupta family at their home on several occasions. The news emerged when Nene testified at the commission of inquiry into state capture last week.
The Dow Jones was open despite it being a public holiday in the US. At the JSE’s close it was down 0.31% to 26,367 points.
Emerging markets were on edge, following the Chinese central bank’s decision to stimulate the economy with further easing measures, and a right-wing populist candidate winning the first round of the presidential elections in Brazil.
The move by the Chinese authorities appeared to work against them, with the Shanghai Composite tumbling nearly 4% amid concerns about growth prospects in the Chinese economy.
Chinese markets as a whole are under tremendous pressure, FXTM analyst Jameel Ahmad said. “We have seen a trend in the past where weakness in China has resonated to other global markets.”
European stocks were also lower after the European Commission said that Italy’s budget plans are a “source of serious concern”, raising the prospect of a clash between Rome and Brussels.
The all share closed 0.35% lower at 54,219.20 points and the top 40 lost 0.45%. Platinums relinquished 1.88%, the gold index 1.07%, resources 0.95%, banks 0.44% and industrials 0.22%. Property rose 1.03%.
Sasol was down 1.32% to R546.04, after Brent crude fell 0.61% to $83.48 a barrel.
South 32 fell 3.79% to R41.62 and Anglo American 0.99% to R320.31.
FirstRand lost 1.3% to R60.90.
Resilient stood out in the property sector, jumping 6.46% to R60.16.
Woolworths gained 2.17% to R48.58 but Shoprite slipped 0.62% to R182.20.
Asset manager Sygnia plunged 12.27% to R7.72.
The rand was last at R14.8893 from R14.7975, while the euro had fallen to $1.1475 from $1.1523.
The US 10-year treasury closed at 3.2296% on Friday amid data that painted a picture of a still-booming US economy, tempered slightly by disappointing nonfarm payroll data on Friday.
Foreigners were net sellers of local bonds to the value of almost R5bn over last week. Non-residents hold about 40% of government debt.
The benchmark R186 government bond was last bid at 9.295% from 9.23%.