MARKET WRAP: JSE slips ahead of busy Wednesday
A series of events will give markets direction on Wednesday, including an ECB policy announcement and a crucial EU Brexit summit
The JSE edged lower on Tuesday, amid caution on global markets, as investors eyed upcoming risk events.
There was little scheduled local economic or corporate news to give the market direction, with focus on offshore events instead.
On Wednesday, the European Central Bank (ECB) will announce its latest stance on monetary policy, while the US Federal Reserve will release minutes from its latest meeting.
EU leaders are also set to meet on Wednesday to consider a request by UK Prime Minister Theresa May to delay Brexit until June 30, as she struggles to find consensus among British MPs.
What local news there was on offer was downbeat. Earlier, the International Monetary Fund (IMF) downgraded SA’s 2019 growth forecast to 1.2% from 1.4% previously.
Rand-hedge Richemont was under pressure, falling 3.88% to R97.87. Earlier, Credit Suisse said it believed the company’s shares were overvalued, as the market “underappreciated” just how much cash the company would need to pour into its operations.
The all share fell 0.25% to 57,838.4 points and the top 40 lost 0.27%. General retailers added 1.58%. The resources index fell 0.47% and banks 0.48%.
Gold was up 0.55% to $1,304.60/oz while platinum had fallen 0.74% to $901.17. Brent crude was 0.82% lower at $70.50 a barrel.
Shortly after the JSE closed the Dow had fallen 0.67% to 26,166.88 points, while in Europe the FTSE 100 had lost 0.3%, the CAC 40 0.58% and the DAX 30 0.85%.
Some focus this week is also on US corporate earnings, with a number of major US financial institutions reporting on Friday. “US earnings will start to trickle in starting on Wednesday, with forecasts calling for a drop in results as geopolitical headwinds have begun to impact companies negatively,” Oanda analyst Alfonso Esparza said.
US-China trade talks have taken a back seat, with focus instead turning to Europe. The White House has threatened to levy tariffs on $11bn worth of European goods, saying these would be implemented in retaliation for subsidies to aircraft manufacturer Boeing.
Sasol fell 0.76% to R465.85.
Sibanye-Stillwater fell 1.45% to R17, having said earlier that it expected first-quarter gold production to decline by two-thirds due to an ongoing strike. The company also said earlier that the labour court had declared that a wage agreement signed with unions at its gold operations in November could be extended to minority union, the Association of Mineworkers and Construction Union (Amcu).
Premier Fishing gained 2.87% to R2.15. It said earlier that revenue rose 55% to R287m in the six months to end-February from the prior matching period. Operating profit trebled to R60m, with the results boosted by the company’s acquisition of Talhado Fishing Enterprises.
Famous Brands slumped 5.24% to R83.