JSE resumes October slide amid myriad risk events

In what continues to be a terrible month for the bourse the JSE all share closed lower on Tuesday, extending losses for this year to 14%. October has been the worst month so far in 2018 for the all share, with the index having fallen 8.15% so far.

Over the past month, since September 24, the all share has only closed in positive territory on four occasions, with a 2.38% gain on October 12 the best day it has had over the period.

The all share ended Tuesday 1.98% lower at 51,168.50 points, another low for the year. Losses were broad-based, with platinums and gold stocks the only positive sectors on the day.

Naspers closed 4.59% weaker at R2,681.05, bringing losses for the year to 22.3%.

Oanda trading head Stephen Innes said risk aversion was permeating every pocket of the markets, whether triggered by President Trump's latest tweets on immigration or the blustery headwinds from Riyadh to Rome. “Markets remain shrouded in a thick blanket of risk.”

The JSE continues to be hammered by global, local and company-specific headwinds, Old Mutual Multi-Managers Dave Mohr and Izak Odendaal said. “The environment has been particularly tough for emerging markets due to the combination of a stronger dollar and higher US bond yields.”

Market focus has shifted to finance minister Tito Mboweni's medium-term budget statement on Wednesday, with analysts agreeing that Mboweni has very little leeway in addressing the burgeoning deficit and rising fiscal debt levels.

It will be interesting to see how the statement pans out, with huge two-way risk for the rand depending on the tone of the speech, said TreasuryOne analyst Andre Botha. “The way the rand has traded gives the distinct impression that the market is uncertain about the future direction of the currency.”

The rand was at R14.3985 to the dollar from R14.3207 at the JSE's close.

The all share hit a record high of 61,776.70 points on January 26. Since then a number of blue-chip stocks have retreated quite sharply.

PSG portfolio manager Schalk Louw said out of the largest shares in the top 40 index, the top five worst performers year-to-date on average had lost more than 40% of their value. He highlighted the resources sectors as the only saving grace for the market.

Property group Resilient has lost 60.4% in 2018, MTN 38.5% and rand-hedge British American Tobacco 21.6%.

Mediclinic fell more than 20% last week, joining the likes of  Woolworths, Brait and Famous Brands.

The resources index has gained 10.4% in 2018, while Sasol is up 13%, Anglo American 18.4% and BHP 11%.