MARKET WRAP: JSE loses almost 2% as BAT slumps and oil rises

Thin liquidity on global markets and a spate of bad corporate news weighed on the JSE on Monday, with local retailers and industrials faring worst.

News that Saudi Arabia will cut oil exports from December sent the price of Brent crude higher, although it is still off its highs for the month.

Some caution was evident in the market, due to risk events later in the week. Brexit talks and discussion of the Italian budget deficit are both on the agenda, as is US inflation data on Wednesday. The latter will be closely watched amid market jitters that the US Federal Reserve is growing increasingly hawkish, and may move to accelerate monetary-policy tightening.

The all share fell 1.94% to 52,259.5 points and the top 40 dropped 2.07%. Industrials lost 3.17%, general retailers 3.08% and banks 2.7%.

Corporate news was negative, with results from Rebosis and Vodacom both disappointing the market.

Rand hedge British American Tobacco crashed 11.3% to R555.74, amid reports US authorities were considering banning menthol cigarettes.

Naspers gave up 3.45% to R2,650.35, extending a 5.31% fall last week. The company's main asset, Tencent, has come under sustained pressure, due to pressure on global tech stocks, as well as moves by Chinese regulators to restrict gaming. The company said last week it was cutting its marketing budget for its gaming division.

Local focus is on Thursday’s retail sales data for September, which could indicate whether SA escaped a recession in the third quarter.

Rand hedge AB InBev fell 1.16% to R1,052.02.

Richemont lost 0.5% to R96.30, having lost 6% on Friday after it reported a 2% decline in headline earnings per share (HEPS) for the six months to end-September.

FirstRand slumped 3.19% to R67.14.

Mr Price lost 4.54% to R236.23 and Woolworths 3.58% to R53.64.

Vodacom slumped 7.69% to R120,30, after reporting earlier that group operating profit climbed 0.8% to R11bn in the six months to end-September.

MTN gave up 6.01% to R79.89.

Rebosis Property Fund plunged 23.46% to R4.60, after earlier reporting a decline in dividend growth for ordinary shares of 27.7% in the year to end August.

Net1 UEPS rebounded 32.57% to R67, having crashed 46.86% on Friday after reporting group revenue dropped 17% to $126m in the year to end-September, with profit under pressure from the cancellation of its social grants contract.

Shortly after the JSE closed gold was 0.35% lower at $1,205/oz and platinum 0.28% at $852.92.

Brent crude was 2.05% higher at $71.04 a barrel.

At the same time the Dow was off 0.63% to 25,824.31, while in Europe, the FTSE 100 had fallen 0.46%, the CAC 40 0.54% and the DAX 30 1.35%.

gernetzkyk@businesslive.co.za