The JSE extended losses on Thursday, tracking weaker global markets, as investors remain anxious about the the spread of the Chinese coronavirus and its effect on the global economy.

With millions of Chinese preparing to travel for the Lunar New Year holiday, China has put the cities of Wuhan, Huanggang and Ezhou on lockdown amid fears the transmission rate will accelerate.

China’s capital Beijing has canceled major public events, including two well-known Lunar New Year temple fairs, the state-run Beijing News said on Thursday, in further attempts to contain the outbreak, reported CNBC.

Earlier, the Shanghai Composite was down 2.75%, Hong Kong’s Hang Seng 1.52% and Japan’s Nikkei 225 0.98%.

Soon after the JSE's close, in Europe, the FTSE 100 was down 0.64%, France’s CAC 40 0.43% and Germany’s DAX 30 0.65%.

“With Chinese New Year starting on Friday, bringing in the year of the rat, Asia clearly smells one with regional markets ignoring a positive overnight session on Wall Street and marking equities sharply lower today,” said Oanda senior market analyst Jeffrey Halley. “The coronavirus outbreak in China is obviously the culprit. The fallout of severe acute respiratory syndrome (SARS) in 2003 remains at the top of Asian investors’ minds.” 

The World Health Organisation’s (WHO) emergency committee is expected to meet in Geneva to assess the global risks posed by the virus and decide if it should be declared an international public health emergency, as happened with swine flu and Ebola.

The JSE all share slumped 1.77% to 56,894.7 points, its biggest one-day fall in more than five months, and the top 40 fell 1.85%. Platinum miners were down 4%, industrials 1.71%, banks 0.97% and financials 0.8%. The all share has finished lower every day this week, having lost 3.57% for the week. It is, however, down just 0.33% since the beginning of the year.

Gold gained 0.33% to $1,564.10/oz, while platinum lost 1.35% to $1,005.38/oz. Brent crude fell 1.69% to $61.64 a barrel.

SA’s largest iron ore miner and exporter Kumba, which is majority owned by Anglo American, said earlier that its earnings for 2019 could be as much as 74% higher due to higher commodity prices and a weaker rand, raising expectations of a strong final dividend.

The company said that its basic earnings and headline earnings for the year to end-December 2019 could be up to R16bn, which is 74% higher than the R9.6bn of 2018. Its share price, however, slumped 6.7% to R390.

Kumba’s parent, multinational diversified resources miner Anglo American, said on Thursday that it had a particularly tough year in its diamond business, with weak demand and low prices the hallmark of 2019. It said rough diamond sales at its 85%-owned De Beers fell by 8% during the year to 31-million carats, while prices dropped to an average of $137 (about R2,000) per carat from $171.

Anglo American Platinum, which also released an update on the day, said Eskom-related power cuts during 2019 had cost it more than R742m in lost production. Its share price relinquished 3.76% to R1,200.

At 6.27pm, the rand had fallen 0.76% to R14.4334/$, while the yield on the R2030 government bond weakened four basis points to 9.02%. Bond yields move inversely to their prices.


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