MARKET WRAP: JSE gains for third day as China relaxes tariffs

The JSE had its third consecutive day of gains on Thursday as China’s move to halve some tariffs on US imports lifted global market sentiment.

China said on Thursday that it would cut additional tariffs on more than 1,700 items imported from the US following the signing of the first phase of a trade deal between the two countries, Reuters reported.

This helped calm global markets, which have been rattled by the rapid spread of the coronavirus, with the death toll now at 565.

“Financial markets were in rally mode after China signaled earlier that it will be halving half of the tariffs on $75bn in US imports. China’s tariff decision shows it is going to try to play nice with the US on the trade front. This tariff action will likely pave the way for it asking for some leniency on delivering on its phase-one purchase commitments,” said Oanda senior market analyst Edward Moya.

“Throughout China’s dealing with the coronavirus, the US has maintained the stance that it expects China to live up to its end of the phase-one trade deal. Today’s news was unexpected and could help push risk appetite much higher in the short-term.” 

Shortly after the JSE closed, the Dow was up 0.13% to 29,328.96 points, while in Europe, the FTSE 100 had added 0.33%, France’s CAC 40 0.82% and Germany’s DAX 0.63%. Earlier, the Shanghai Composite rose 1.72%, Hong Kong’s Hang Seng 2.64%, and Japan’s Nikkei 225 2.38%.

At 5.20pm, the rand had weakened 1.11% to R14.9106/$, 0.73% to R16.3614/€ and 0.71% to R19.2837/£. The euro fell 0.31% to $1.0956.

Gold was up 0.45% to $1,562.94/oz, while platinum fell 1.94% to $962.70. Brent crude lost 1.30% to $54.86 a barrel. 

Locally, the SA Chamber of Commerce and Industry (Sacci) business confidence index dropped 0.9 points to 92.2 in January, data showed on Thursday. This was below the median forecast of 93.2, according to a Bloomberg poll.

The JSE all share rose 0.18% to 57,531.49 points and the top 40 0.25%. Banks gained 1.47% while the platinum index dropped 2.64%.

ArcelorMittal SA said on Thursday that it had swung into a R4.67bn loss in its year to end-December. Its share price fell 4% to R1.20. 

AVI said on Thursday that its expects consolidated earnings per share to be 20% higher in the six months to end-June. The company said the disposal of food manufacturer I&J’s interests in Simplot Australia resulted in a capital gain of  about R370m. its share price fell 0.36% to R77.45.   

Impala Platinum said earlier that it expects headline earnings per share to have increased between 32% and 50% in the six months to end-December 2019.

mjoo@businesslive.co.za