MARKET WRAP: JSE slips 1% as risk events loom
Rand hedges and diversified miners suffer a little from a firmer rand and poor Chinese economic data, while next week is a busy one
The JSE fell on Friday in broad-based losses, but ended the week a little higher, as investors digested data indicating a global economic slowdown.
Sentiment cooled after data earlier showed that Chinese industrial production growth fell to a 17-year low in May. US retail sales numbers for May also disappointed, growing 0.5% year-on-year, against market expectations of 0.6%, although April’s figure was revised upwards.
Markets also remain on edge after two oil tankers were attacked in the Persian Gulf, analysts said, while uncertainty regarding how the US-China trade war will unfold persists.
The rand was a little firmer on Friday, putting some pressure on rand hedges, but the outlook for the currency remains somewhat cloudy. Political noise around the nationalisation of the Reserve Bank was weighing on the currency, whose bias was for weakening the rand, said Nedbank Corporate and Investment Banking analyst Walter de Wet in a note.
As the JSE closed, the rand was 0.66% firmer at R14.7716/$, offering a modicum of support to local interest rate-sensitive stocks.
The all share fell 0.86% to 58,193.8 points and the top 40 0.81%. Resources fell 1.44% and industrials 0.7%.
As the JSE closed, gold was up 0.86% to $1,348.10/oz while platinum had fallen 0.48% to $804.66. Brent crude was 1.29% higher at $62.12 a barrel.
The Dow had fallen 0.27% to 26,036.7 points, while in Europe, the FTSE 100 was down 0.19%, the CAC 40 0.31% and the DAX 30 0.7%.
Diversified miner BHP lost 1.98% to R356.84, Anglo American 1.58% to R392.63, and Glencore 1.52% to R50.55%.
Kumba Iron Ore relinquished 3.75% to R475.19 and Exxaro 3.63% to R172.38.
Rand hedge AB InBev slipped 2.57% to R1,247.07 and British American Tobacco 1.74% to R539.37.
AngloGold Ashanti rose 3.68% to R237.70, Harmony 2.21% to R29.11,and Gold Fields 1.75% to R78.
Shoprite added 1.43% to R165.88 and Clicks 1.17% to R207.93.
Naspers fell 1.05% to R3,448.43, having added 0.68% on Thursday, as markets digested news from the market heavyweight that it headline earnings per share (HEPS) from total operations, a metric that strips out non-operational items, increased by between 31% and 33% in the year to end-March. These results are due on Friday June 21.
Omnia gave back 0.39% to R38.01 after saying earlier that it expects to report a headline loss per share for the year to end-March of up to R1.39. This compares to a headline profit per share of R9.91 the previous year.
Despite trading ex-dividend, Tsogo Sun gained 2.41% to R16.59.
Trade on the JSE on Friday was a little subdued as Monday is a public holiday. The week ahead, however, is a busy one, with local consumer inflation due on Wednesday. The Bloomberg consensus is for inflation of 4.4% in May, unchanged from April.
Further details on state policy towards state-owned enterprises may also be outlined on Thursday, when President Cyril Ramaphosa delivers the state of the nation address (Sona).
All eyes will also be on the US Federal Reserve, which will make its latest stance on monetary policy known on Wednesday.