MARKET WRAP: JSE closes lower as hopes of a trade truce wane

The JSE closed lower on Tuesday, with investors moving to safe havens as hope that the US and China will have successful trade talks this week faded.

Global equities were under pressure on Tuesday after reports that the US is going ahead with discussions to possibly restrict capital flows to China, mainly investments made by US government pension funds, Bloomberg reported on Tuesday.

This follows a move by the Trump administration on Monday to blacklist several Chinese tech companies over the country’s treatment of predominately Muslim ethnic minorities.

“The move from the US is symbolic in two ways: it’s a response to China reportedly trying to shrink the areas covered by a trade deal; and a reminder that technological security and intellectual property are top of the US agenda. At this stage, it feels like we are just taking solace in the talks even taking place despite the clear differences on the two sides,” said London Capital Group head of research Jasper Lawler.

At 5.19pm, the rand weakened 0.64% to R15.2759/$ and 0.47% to R16.728/€, while it was flat at R18.6466/£. The euro weakened 0.18% to  $1.0951.

The benchmark R186 government bond was weaker, with the yield rising eight basis points to 8.28%. Bond prices move inversely to bond yields.

Gold added 0.59% to $1,502.13/oz and platinum 0.66% to $882.69. Brent crude lost 0.46% to $58.10 a barrel.

The Dow fell 1.06% to 26,201.85 points, while in Europe, the FTSE 100 was down 0.39%, France’s CAC 40 0.88% and Germany’s DAX 0.81%.

Earlier, the Shanghai Composite gained 0.29%, Hong Kong’s Hang Seng 0.28% and Japan’s Nikkei 225 0.99%.

The JSE all share fell 0.33% to 54,532.70 points and the top 40 0.35%. Banks fell 1.2% while gold miners rose 1.82% and the platinum index 1%.

Absa fell 2.2% to R148.62, Standard Bank 1.3% to R171.24 and FirstRand 1.15% to R62.83.

Long4Life said earlier it had acquired a further 9.2-million shares in Spur Corporation as of October 4, increasing the company’s stake in the franchise restaurant chain to 12% from 4%. Long4Life fell 0.25% to R3.98, while Spur gained 5.54% to R24.97.

Zeder gained 0.44% to R4.55. The company said on Tuesday its recurring headline earnings per share (HEPS) decreased by 63% to 3.6c in the six months to end August, mostly due to the weaker performance of most of its investees as a result of challenging trading conditions experienced by the food and related business sectors.

Insimbi gained 2.8% to R1.10 after the metal alloys supplier said on Tuesday its HEPS increased 11% to 9.42c in the six months to end-August.

Harmony led the gains among the gold producers, up 2.7% to R48.35. This was followed by Sibanye-Stillwater’s 1.89% to R24.32, Gold Fields’ 1.86% to R83.84 and AngloGold Ashanti’s 1.47% to R315.55.

The SA Chamber of Commerce and Industry (Sacci) is expected  to release its business confidence index for September on Wednesday. The median forecast among economists polled by Bloomberg is for the index to have fallen to 89 points after it reached a 34 year-low, at 89.1 points, in August.

mjoo@businesslive.co.za