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Cape Town – All major JSE sectors closed lower on Tuesday, after an extended Easter trading. Diversified mining stocks were under pressure as commodity prices fell as expectations of international growth cooled off due to the delayed spending plans of US President Donald Trump.
Globally, investors remain concerned amid heightened geopolitical risks, reducing the demand for equity investments in favour of safe-haven assets such as gold. Gold rallied 0.5% to $1290/Oz as political tensions between the US and North Korea escalated over the weekend, after North Korea attempted to test a long-distance ballistic missile on Sunday; the missile exploded on launch. The failed missile attempt prompted US Vice President Mike Pence to remark that “the era of strategic patience” with North Korea “is over”.
The rand remained flat against the dollar during the trading day, closing at R13.30 to the greenback. The JSE blue-chip Top 40 closed 1.65% lower, followed by the broader All Share Index closing 1.57% lower. Overall, the major market sectors saw red with the Resources Index dropping 2.95%, the Industrial Index down 1.17%, and the Financial Index 0.78% softer.
International Markets
London: Theresa May has called for a snap general election in the UK, with the vote to be held on June 8. The early election is a tactical move intended to strengthen the political control of the conservative party ahead of Brexit negotiations. Sterling rallied higher on the announcement, and traded at $1.27 near the close of the trading session. The FTSE 100 closed 2.46% lower
READ: London stocks plunge as May calls snap UK election
New York: The S&P 500 traded 0.46% lower at the close of the JSE as the financial and healthcare sectors remain under pressure. Investor sentiment is low after Treasury Secretary, Steve Mnuchin, told the financial times that it was unlikely that tax reforms will be implemented in time to have an impact on 2017.
Crude Oil traded 0.23% lower at $55.23/bbl on Tuesday, supported by the weaker US dollar. An increase in US shale production is expected to reverse the efforts made by Opec to reduce supply. The Baker Hughes weekly rig count indicates that 11 rigs were brought into production last week, elevating the total operating amount to 847 In the United States, up 92% since April last year.
*This report is from the Trading Desk at EasyEquities, Fin24's latest content partner on equities and market moves.
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