MARKET WRAP: JSE closes lower as trade war optimism fades
The rand was still the best performing emerging-market currency over the past five days after hitting a three-week high on Friday
The JSE closed lower on Monday, in line with European stocks after reports that China wants to conduct another round of trade talks before signing a partial agreement with the US.
The two countries came to a “phase-one” agreement on Friday, which included the US suspending a tariff hike on $250bn worth of Chinese goods while China agreed to purchase more agricultural products from the US.
China also wants the US to scrap a tariff hike which would be imposed in December, Bloomberg reported on Monday.
“The ‘phase 1’ deal did not really address the most sensitive issues in the trade dispute, especially technology transfer, intellectual property theft and currency manipulation,” FXTM market strategist Hussein Sayed said in a note.
“The deal also didn’t remove any of the existing tariffs on Chinese imports. If you’re a US or a Chinese business, such developments will not help deciding on your future plans. That’s why I like to call the current agreement a trade truce rather than a trade deal,” Sayed said.
Shortly after the JSE closed, the Dow was flat at 26,828.60 points. In Europe, the FTSE 100 had lost 0.52%, France’s CAC 40 0.39% and Germany’s DAX 30 0.22%.
Earlier, the Shanghai Composite rose 1.15% and Hong Kong’s Hang Seng 0.81% while Japan’s Nikkei 225 was closed for a public holiday.
At 5.28pm, the rand had weakened 0.23% to R14.826/$ and 0.1% to R16.3372/€ while it had strengthened 0.1% to R18.6551/£. The euro weakened 0.13% to $1.1019.
The rand was still the best performing among emerging-market currencies over the past five days after reaching a three-week high on Friday.
The benchmark R186 government bond was stronger, with the yield falling one basis point to 8.22%. Bond prices move inversely to bond yields.
Gold added 0.24% to $1,492.19/oz and platinum 0.45% to $895.64. Brent crude dropped 3% to $58.84 a barrel.
The JSE all share fell 0.57% to 55,219.20 points and the top 40 0.59%. Resources dropped 1.62%, while gold miners rose 1.88%.
Glencore fell 2.94% to R43.18, BHP Group 2.33% to R312.74 and Anglo American 2.28% to R359.34
Gold Fields rose 3.54% to R83.76, Anglogold Ashanti 1.64% to R301.01 and Sibanye 1.46% to R23.69.
Adapt IT fell 2.73% to R4.28. The company said on Monday that its headline earnings per share decreased by 8% to 57.27c in the year to end-June.
Long4Life rose 2.75% to R4.11. The company said on Monday that its trading profit increased 13% to R201m in the six months to end-August.
Wilson Bayly Holmes-Ovcon gained 1.68% to R144.50. The construction company said on Monday that Old Mutual had acquired more of its ordinary shares, taking the insurer’s total interest to 10.01%. Old Mutual’s share price fell 0.95% to R19.75.