MARKET WRAP: JSE closes lower as global risk factors persist

The JSE closed lower on Monday as investors kept an eye on global risk factors amid growing concern about the effect of the US-China trade war on global growth.

The prolonged trade war may not be over any time soon, after US President Donald Trump said the two economic superpowers are continuing with negotiations but were still some way off reaching a deal.

The trade war has weighed significantly on the rand, which has come under further pressure as investors fret about the government’s efforts to bail out power utility Eskom. The rand reached R15.46/$ at one stage on Monday, its weakest level in 2019.

Shortly after the JSE closed, the rand had weakened 0.46% to R15.3424/$, 0.68% to R17.2206/€ and 0.66% to R18.5287/£. The euro had strengthened  0.24% to $1.1226.

The benchmark government 10-year bond was weaker, with its yield rising eight basis points, or 0.08 percentage points, to 8.46%. Bonds yields move inversely to bond prices.

Gold had gained 0.53% to $1,505.15/oz while platinum had fallen 0.18% to $859.17. Brent crude was 0.39% higher at $58.49 a barrel.

The Dow was down 1.02% to 26,018.11 points. In Europe, the FTSE 100 had lost 0.17% and France’s CAC 40 0.11%, while Germany’s DAX 30 was flat.

Earlier, in Asia, the Shanghai Composite rose 1.45% while Hong Kong’s Hang Seng fell 0.44%.

The JSE all share fell 0.29% to 55,371.50 points and the top 40 0.22%. Banks lost 1.03% and financials 1.28%. 

FirstRand fell 1.75% to R56, Absa 1.26% to R148.30, Standard Bank 0.81% to R169.82 and Nedbank 0.38% to R219. 

Quilter fell 3.09% to R24.13, Sanlam 1.31% to R70.28 and Old Mutual 1.14% to R18.19.

RCL Foods jumped 8.16% to R11.14. 

Blue Label Telecoms slumped 12.03% to R3.95. 

Naspers fell 0.21% to R3,442.88. The company earlier announced the closing of a $125m fundraising earmarked for investment in Meesho, an Indian online marketplace. 

Discovery dropped 8.44% to R105.72, reaching its lowest level in almost five years during intra-day trade as investors anticipate the effect of the National Health Insurance bill which was introduced to parliament last week. It also lost 8.5% on Thursday.

Aspen Pharmacare dropped 10.2% to R75.91.

Libstar fell 3.03% to R7.99 despite the company saying on Monday that it expects group revenue to increase 4.5% for the six months ended June.

Omnia relinquished 1.47% to R33.57 after the chemicals and fertiliser maker said on Monday it planned to sell R2bn worth of new shares at a subscription price of R20 per rights offer share. 

Murray & Roberts fell 0.9% to R12.15 after the company said on Monday that its US subsidiary Clough USA had been awarded a $620m petrochemical engineering, procurement and construction project.

On Tuesday, the US is scheduled to announce its inflation rate for July amid mounting expectations that the US Federal Reserve will cut its interest rate at the Fed’s next meeting in September. The consensus is for a rise of 1.7% year-on-year from 1.6% in June, according to Trading Economics.

mjoo@businesslive.co.za