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Trade war weighs on the JSE

Apr 03 2018 18:02
Musa Makoni, EasyEquities

Cape Town - The threat of a trade war between the US and China has sent jitters into global equity markets and the JSE has not been spared. The local bourse closed weaker on Tuesday which was in line with other global markets.

The sell-off on Tuesday emanated from the sharp sell-off in US listed tech stocks on Monday, which resulted in the Nasdaq index closing 2.74% lower. China retaliated to US steel and aluminium tariffs by imposing tariffs of up to 25% on US$3 billion worth of food imports from the USA. The Dow Jones and S&P 500 indices also traded significantly lower in Monday’s session.

On the JSE, Gold Fields [JSE:GFI] and African Rainbow Minerals [JSE:ARM] shed 4.73% and 4.63% respectively to end amongst the day’s biggest losers. Kumba Iron Ore [JSE:KIO] and Exxaro [JSE:EXX] also came under significant pressure to end the day 3.09% and 2.84% lower. Retailers The Foschini Group [JSE:TFG] and Massmart [JSE:MSM] traded softer to end the day 1.87% and 3.19% weaker.

On the blue-chip index Mediclinic [JSE:MEI] and Sanlam [JSE:SLM] lost 4.94% and 3.15% respectively. Rand hedges British American Tobacco [JSE:BTI], Mondi PLC [JSE:MNP] and Richemont [JSE:CFR] traded under pressure to end the day 1.8%, 2.45% and 1.79% lower. Banking stocks Barclays Africa [JSE:BGA] and Standard Bank [JSE:SBK] lost 2.49% and 1.78% respectively.

Bidvest [JSE:BVT] and NEPI Rockcastle [JSE:NRP] were the only stocks on the blue-chip index to record significant gains as they closed the day up 1.3% and 0.4% respectively. Tiger Brands [JSE:TBS] and Mr Price [JSE:MRP] closed flat after recording marginal gains of 0.05% and 0.01% respectively.

On the broader index Greenbay Properties [JSE:GRP] and Resilient [JSE:RES] recorded gains of 6% and 3% respectively. Royal Bafokeng Platinum [JSE:RBP] and South32 [JSE:S32] climbed 4.56% and 1.68% respectively. Brait [JSE:BAT] gained 1.47% to close at R36.63, whilst Dis-Chem added 2.75% to close at R35.45.

The JSE All-Share index eventually closed 1.10% weaker whilst the JSE Top-40 Index shed 1.26%. The Industrials Index came under pressure to close the day 0.84% weaker, whilst the Financials and Resources Indices took the biggest knock to end the day 1.50% and 1.59% weaker.

Locally, ABSA Manufacturing PMI numbers disappointed as they were recorded at 46.9 for the month of March, from a prior recording of 50.8. Naamsa Vehicle Sales year-on-year improved from the prior recording of -3.8% to 1.1%.

The rand firmed marginally against the greenback to peak at a session high of R11.79/$, it retraced to trade at R11.81/$ at 17:00 CAT.

Metals traded weaker on Tuesday and at 17.00 CAT gold was trading at 1 329.42/Oz, platinum at $919.03/Oz and palladium at $934.24/Oz.

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