Picture: MICHAEL BRATT
Picture: MICHAEL BRATT

The JSE weakened sharply on Tuesday, under pressure from a risk-off global environment, and investor caution ahead of the medium-term budget policy statement (MTBPS).

Global markets, in general, were weaker, with the Dow opening sharply lower, as sentiment remains under strain due to geopolitical tension in the Middle East and concern over the Italian budget deficit.

Gold miners found support from a weaker rand and investor interest in safe-haven assets, however, with the price of the precious metal climbing to a three-month high.

Analysts expect cautious trade ahead of the medium-term budget, which will be closely scrutinised for signs it will provide some sort of fillip for SA’s struggling economy.

The all share fell 1.98% on the day to 51,1168.5 points and the top 40 2.23%. Banks relinquished 2.6%, general retailers 1.8% and industrials 2.27%. Gold miners rose 5.32% and platinums 1.21%.

Asian markets were sharply lower on Tuesday, after enthusiasm following the announcement of a Chinese stimulus package on Monday. On Tuesday, Naspers plunged 4.59% to R2,681.05 tracking losses in Chinese associate Tencent.

The remaining trading sessions this week are expected to be fairly eventful, with a host of local and international economic data due for release. On Wednesday, local consumer inflation data for September is due, while producer inflation data is expected on Thursday.

The primary data release this week is US GDP numbers on Friday, which should give the market further clarity on the health of the US economy, amid fears that trade conflict is stunting global growth.

Diversified miner Glencore lost 3.14% to R56.15 and Anglo American 2.31% to R302.70. Sasol dipped 3.97% to R484.

Kumba Iron Ore fell 4.66% to R278.20, after earlier reporting that production and sales volumes for the nine months to end-September were within previous guidance, rising 9% compared with the period a year earlier.

Rand hedge British American Tobacco (BAT) jumped 4.56% to R650.

Standard Bank lost 3.66% to R157 and Nedbank 2.84% to R227.11.

Mondi plc lost 2.15% to R326.83, extending Monday’s 2.66% slide.

Shortly after the JSE closed, the Dow was 1.8% weaker at 24,870.37 points, while in Europe the FTSE 100 had lost 1.4%, the CAC 40 1.92% and the DAX 30 2.38%.

At the same time, gold was up 0.82% at $1,231.05 an ounce and platinum 0.66% to $827.92.

Some comfort came in the form of a sharp drop in the oil price, which followed pledges from Saudi Arabia to boost output. Brent crude plunged 3.07% to $77.61 a barrel.

gernetzkyk@businesslive.co.za