JSE. Picture: MICHAEL ETTERSHANK
JSE. Picture: MICHAEL ETTERSHANK

Global investors favoured safe havens this week after news broke that US Democrats are beginning a process to impeach President Donald Trump.

Equities took a hit earlier as markets are concerned that the Trump news may hamper US-China trade talks, which appeared to be heading towards a resolution. European markets, however, recovered later in the day, while emerging markets continued to feel the pinch.

The rand was particularly hard hit, falling to levels it last reached about three weeks ago. At 5.48pm, it had weakened 0.77% to R15.1582/$, 1.04% to R16.5956/€ and 0.66% to R18.6592/£. The euro was 0.23% firmer at $1.0942. Local government bonds hardly moved, however, with the benchmark R186 last bid at 8.3%. Bond prices move inversely to their yields.

The JSE ended marginally lower, with the all-share index falling 0.11% and the top 40 0.15%. Banks lost 1.14% and gold miners, which have run hard of late, 4.54%.

In phone call transcripts, it seems Trump asked for help from Ukrainian authorities to investigate former US vice-president Joe Biden and his son. Biden is the leading candidate to take on Trump for the presidency in the 2020 elections.

Trump has fought back against the allegations, with tweets including “Presidential Harassment” and “Witch Hunt”.

“The market’s destiny is at Donald Trump’s fingertips. A single tweet ... could send equities rallying, while they could also shatter market sentiment,” London Capital Group senior market analyst Ipek Ozkardeskaya said, adding that Trump’s next move “is anybody’s guess”.

Soon after the JSE closed the Dow was flat at 26,899.12 points. European bourses were higher, however, with the FTSE 100 up 1.02%, France’s CAC 40 0.36% and Germany’s DAX 30 0.75%.

Gold was down 0.43% to $1,498.78/oz while platinum was up 0.66% to $932.78. Brent crude lost 1.48% to $61.71 a barrel.

Brent is now back at levels last seen before the September 14 drone attack on Saudi Arabia’s oil production facilities, with the Middle Eastern country saying earlier that production was almost back to pre-attack levels. A rise in US inventories also weighed on prices.

Earlier, the Shanghai Composite added 0.11% while Hong Kong’s Hang Seng was down 0.33% and Japan’s Nikkei 225 0.77%.

Net1 said on Friday that it recorded a loss of $248m (R3.7bn) in its year to end-June, mostly due to losing its lucrative social grants contract. Its share price was unchanged at R51.

Richemont added 1.28% to R111.17 after the luxury goods company said earlier that it has acquired Italian jewellery company Buccellati from Chinese conglomerate Gangtai Group.

Anglo American gained 1.95% to R349.85 after Bloomberg reported its subsidiary De Beers has extended the policy from its August sale, letting buyers refuse half the stones in each parcel offered. Bloomberg said De Beers is also allowing them to sell back some diamonds on favourable terms, due to a recent slump in the market. The company, however, declined to comment on the news.

Blue Label Telecoms recovered 1.01% to R3, after sliding more than 12% on Thursday when it reported it had swung into a full-year loss that was equal to more than double its market capitalisation. It said the fall was due to trading losses and debt problems at the country’s third largest mobile operator, Cell C, in which it is the major shareholder.

lindera@businesslive.co.za