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Cape Town - Naspers [JSE:NPN] traded under significant pressure on the JSE after its associate, Tencent Holdings, edged lower on the Hang Seng closing down 4%.
Tencent Holdings was under pressure mainly due to the news that the Chinese government was going to step up its scrutiny of online and mobile games, according to Bloomberg.
This was after a Chinese government owned newspaper criticised one of Tencent Holdings’ top grossing games for harming children in the pursuit of profits. The stock was down more than 5% at some stage before it recovered slightly to close down 4.13%.
Given the harsh extent of censorship in China, the possibility of one of Tencent’s cash cows getting banned is a worrying factor for investors.
The rand was caught in volatile trade as it strengthened slightly in early morning trade to reach intra-day highs of R13.16 against the greenback. However this strength was short lived as the currency subsequently lost some ground to reach lows intra-day of R13.27 against the US dollar. The US dollar was relatively stable as there wasn’t any data out of the USA due to their Independence Holiday. When the JSE closed the rand was trading at R13.24/$.
The benchmark JSE All-Share Index closed in the red despite most of the stocks in the top 100 closing in the green. The index closed down 0.22% as big weightings Naspers and Richemont closed 4.37% and 0.28% lower, dragging down the broader index. The blue chip Top-40 Index was down 0.38%. Resources had a marginal recovery after the sell-off that we had on Monday which saw the Resources Index eventually closing up 1.33%. The Financials Index also closed in positive territory firming by 0.70%, however the Industrials Index was down 1.15%.
On the commodity front, metals staged a minor recovery despite trading lower in early morning trade. Gold managed to reach intra-day highs of $1226.59 per ounce which pushed the major Gold miners on the JSE higher, with AngloGold Ashanti closing up 2.49% and Gold Fields firming 2.97%.
The metal was trading at $1223.10 per ounce when the JSE closed. Platinum and Palladium also turned positive in the day’s session managing to reach highs of $916.50 per ounce and $862.90 per ounce respectively. Platinum miners benefitted from this strength which saw stocks such as Impala Platinum and Anglo American Platinum closing up 1.96% and 1.34% respectively. When the JSE closed Platinum was trading at $913 per ounce and Palladium was trading at $857 per ounce.
The positive trend in Brent Crude continued as the commodity was 10 cents shy of reaching $50 per barrel, managing to reach intra-day highs of $49.90 per barrel. Sasol continued to benefit from this move as well as the relatively weaker Rand, and the stock closed up 0.53%.
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