Stronger dollar and trade worries dent JSE
Reports the US will push to extradite the Huawei CEO has weighed on sentiment, with local miners and Naspers under the most pressure
A stronger dollar and renewed fears about economic fallout from the US-China trade war weighed on the JSE on Tuesday morning, with the local bourse tracking weaker global markets.
The International Monetary Fund (IMF) has lowered its global growth forecast for 2019 to 3.5% from 3.7%, reducing investor appetite for risky assets.
This comes after Chinese data showed the world’s second-largest economy grew at its slowest pace in 28-years in 2018.
Chinese growth has also become increasingly consumption driven, with the resultant decreased demand for commodities likely to weigh on the rand in the medium term, said Momentum Investments economist Sanisha Packirisamy. About 80% of economic growth was due to consumption in the fourth quarter of 2018 in China, up from 35% in 2003.
At 9.50am the JSE all share index was down 0.51% to 53,860.7 points and the top 40 was down 0.64%. Industrials fell 0.89%, while gold miners rose 1.71%.
Reports that US authorities are planning a formal extradition request of the CEO of Chinese tech-giant Huawei also weighed on sentiment, reported Dow Jones Newswires. US President Donald Trump has previously said he will intervene on the issue, if it is in the best interest of securing a new US-China trade deal.
Gold was flat at $1,280.80/oz while platinum had lost 0.72% to $791.30.
Brent oil was 1.07% lower at $62 a barrel.
Diversified miner Glencore gave up 1.21% to $52.40 and Anglo American was down 0.9% to R322.16.
Rand hedge AB InBev added 1.11% to R1,025.
Shoprite fell 3.23% to R180.
Naspers was down 2.51% to R3,085.38.