MARKET WRAP: JSE subdued as US-China trade war drags on
Precious-metal miners fared well on the day, but losses by most other indices kept the local bourse in negative territory on Monday
The JSE closed lower on Monday, with sentiment still fragile in the wake of an escalating US-China trade war, although a strong performance by precious-metal miners helped the local bourse offset the losses by other indices a little.
Sentiment has picked up somewhat after US President Donald Trump said on Monday trade talks with China would resume, further expressing optimism that a deal could be reached.
Chinese officials also expressed a desire to resume talks and ultimately reach a deal, helping European and US markets recover from sharp losses they posted on Friday.
A sharp escalation in rhetoric from both sides on Friday had prompted a wave of sell-offs for risk assets, including a 3% fall by the tech-heavy Nasdaq, with China dealing the first blow when it said it would impose retaliatory tariffs on US products from September 1.
The US also upped the quantum of tariffs it intends to levy on China, with US President Donald Trump “ordering” US companies to begin seeking supply arrangements in alternative countries over the weekend.
The JSE and the rand were faring well despite the stream of news, said Capicraft portfolio manager Drikus Combrinck, likely as a result of the some positive news related to the US and Japan edging towards their own trade deal.
“That’s strengthened the hand of the US a little and is acting like a bit of shock absorber ... mitigating the trade-war fallout,” Combrinck said.
The all share gave up 0.34% to 53,811.9 points and the top 40 0.43%. Platinum miners added 5.45% and gold miners 3.2%. Financials lost 0.39% and property stocks 0.95%.
Shortly after the JSE closed the Dow was up 0.61% at 25,781 points, while in Europe, the CAC 40 and DAX 30 were flat.
Gold was up 0.51% to $1,533/oz, while platinum had fallen 0.54% to $856.07. Brent crude was little changed at $59.05 a barrel.
The JSE Limited added 2.98% to R122.28. It said earlier it would buy 74.9% of Link Market Services SA, the country’s second-largest share-register business, for a total consideration of R224.5m.
Stadio fell 3.11% to R2.80. It said earlier that net profit jumped 47% to R52.2m in the six months to end-June.
Sasol slipped 1.92 to R266. It reported that it had lowered its expected earnings guidance for its Lake Charles Chemical Project, as it continues to suffer technical delays.
Safari Investments lost 4% to R4.80. It said earlier that its shareholders were likely to reject an offer for its entire issued share capital from Comprop, saying it had received written statements from, or on behalf of, shareholders holding more than 25% of its shares.
Atlantic Leaf lost 1.23% to R16. It said earlier that it had acquired another industrial property in the UK, ensuring that its industrial exposure by value had risen to 79% from 70% previously.
Shoprite gave back another 1.86% to R114.13. The retailer plummeted 16.55% last week, having said on Tuesday that its trading profit slumped 14.3% in the year to end-June, partially as a result of continued problems with hyperinflation in Angola.
Logistics company Super Group added 3.23% to R28.75. It said earlier its profit rose 13% to R1.3bn for the year to end-June.