Gold miners on the JSE suffered their biggest single-day drop in almost a month on Thursday, with the overall market also lower despite an easing in tension between the US and the Middle East. 

Asian and European markets strengthened after US President Donald Trump said the US would not resort to military action but would likely impose further sanctions on Iran. 

“Whatever the motives for the de-escalation, there’s clearly relief across the markets as haven positions are unwound and risk appetite bounces back. It’s certainly been a bizarre start to the year and comes as a reminder that we live in very unusual and uncertain times and these kinds of shocks can and will, at times, come from nowhere,” said Oanda senior market analyst Craig Erlam. 

On the trade-war front, China’s commerce ministry said on Thursday that the initial phase-one agreement is expected to be signed next week in Washington. Trump said in December that the deal could be concluded on January 15.

“Investors are hoping it removes the biggest source of uncertainty over the economic outlook, paving the way for more investment returns this year,” said London Capital Group head of research Jasper Lawler. 

Shortly after the JSE closed, the Dow was up 0.55% to 28,901.85 points. In Europe, the FTSE 100 added 0.43%, France’s CAC 40 0.2%, and Germany’s DAX 30 1.27%.

Earlier, the Shanghai Composite rose 0.91%, Hong Kong’s Hang Seng 1.68% and Japan’s Nikkei 225 2.31%. 

The rand began the day stronger before turning negative as local manufacturing data for November contracted more than expected, by 3.6% from a contraction of 0.8% in the previous month. This was below the Bloomberg median forecast of a contraction of 1.3%. 

“Recent economic statistics continue to reflect weak economic conditions, with no sign of any upward momentum. These subdued conditions are expected to continue throughout 2020, suggesting there is unlikely to be much demand pressure on prices and that inflation is likely to remain relatively benign,” Nedbank economists said in a note.

The World Bank cut its 2020 growth forecast for SA from 1.5% to 0.9% on Wednesday, citing “an array of overlapping constraints”.

At 5.32pm, the rand had weakened 0.28% to R14.2163/$. It has, however, been the best performing among emerging-market currencies tracked by Bloomberg over the past three months, slightly ahead of the Chilean peso. It was 0.28% softer to R15.7841/€, while flat at R18.5481/£. The euro was little changed  at $1.1103.

The R2030 government bond was weaker with the yield rising 1.5 basis points to 9.04%. Bond prices move inversely to their yields.

Gold was down 0.49% to $1,548.045/oz while platinum added 1.13% to $965.79. Brent crude lost 1.7% to $64.61 a barrel. 

The JSE all share fell 0.34% to 57,128.7 points and the top 40 by a similar margin. Gold miners dropped 3.31% and platinum miners 2.17%. Gold Fields lost 4.32% to R89.41, Sibanye 3.05% to R35.92, and AngloGold Ashanti 3.03% to R306.75.

Construction company Aveng said on Thursday that it had been notified by developer 75 on Maude to terminate the contract for the construction of the Leonardo in Sandton due to a dispute about delays. Its share price was unchanged at 2c.