MARKET WRAP: JSE drops as markets await progress in trade talks
The leading business cycle indicator fell to 103.2 in September from 103.8 in August, according to data from the Reserve Bank
The JSE was lower on Tuesday while global markets remained mixed as traders await the latest news in the US-China trade talks.
US and Chinese trade negotiators communicated by phone on Tuesday to discuss some of the crucial issues in the protracted trade war, amid hopes that a partial trade deal will be completed by the end of 2019.
Reuters reported on Tuesday that China said it had reached a “common understanding on resolving relevant problems” with US negotiators.
“We are getting a constant drip feed of updates on how negotiations are going from both sides and it does all sound positive. My only problem is that we’ve had this all before and when it’s been more than a month since the deal was announced and more than a week since it was meant to be signed, I’m a little sceptical,” said Oanda senior market analyst Craig Erlam.
At 5.19pm, the rand had weakened 0.15% to R14.8013/$ and 0.16% to R16.3019/€, while it had firmed 0.2% to R19.0248/£. The euro was flat at $1.1013.
Gold was up 0.12% to $1,456.63/oz and platinum 0.73% to $901.49. Brent crude added 0.61% to $63.96 a barrel.
The R2030 government bond was weaker with the yield rising four basis points to 9.26%. Bond yields move inversely to their prices.
The Dow was up 0.10% to 28,094.72 points. In Europe, the FTSE 100 was up 0.14% and France’s CAC 40 0.13% while Germany’s DAX 30 was flat. Earlier, the Shanghai Composite was little changed while Hong Kong’s Hang Seng fell 0.29% and Japan’s Nikkei 225 gained 0.35%.
The leading business cycle indicator fell to 103.2 in September from 103.8 in August, data from the Reserve Bank showed on Tuesday.
“While this is just one set of figures, they are nevertheless of concern as they indicate a slowdown in the second quarter of 2020, where the first quarter of every year has contracted in SA since 2016,” said Investec chief economist Annabel Bishop.
The JSE all share fell 1.22% to 56,053.4 points and the top 40 1.3%. Banks dropped 3% and financials 2.04%.
FirstRand fell 3.38% to R62.25, Absa 3.18% to R149.50, Nedbank 3.09% to R220.50, and Standard Bank 3.02% to R165.10.
Capital & Regional said on Tuesday that its shareholders have approved the sale of a controlling stake of the company to SA property company Growthpoint. Capital & Regional’s share price gained 2.8% to R5.50 while Growthpoint fell 0.96% to R22.58.
Wescoal gained 3.33% to R1.24. The coal producer reported a headline loss per share of 11.9c for the year to end-September on Tuesday, from headline earnings per share (HEPS) of 23.5c previously. “We are optimistic that we will achieve operational stability in the second half of financial year 2020 and add significant production volumes,” the company said.
Transaction Capital gained 1.88% to R21.73. It said on Tuesday that core HEPS increased 18% to 131.3c in the year to end-September despite challenging macro-economic conditions.
Omnia gained 4.79% to R31.75 after the company said on Tuesday that it recorded an after-tax profit of R35m in the six months to end-September, from a loss of R93m in the previous period. Omnia reported a HEPS of 49c from a headline loss per share of 122c previously.
The company said it remains focused on “stabilising the business, initiating a turnaround strategy and improving its capital structure following a successful rights issue”.