Volatility peaks as trade war intensifies

Apr 04 2018 17:49
Musa Makoni, EasyEquities

Cape Town - The JSE closed weaker on Wednesday in a session that was characterised by high volatility among the blue-chip constituents.

The JSE All-Share Index retraced significantly from its session lows, but it still closed lower nonetheless. More details of China’s retaliation to US tariffs were released on Wednesday and as a result global equity indices came under more pressure.

The ALSI futures index had big swings which saw it lose more than 1 600 points at its lowest point today, only to recoup most of its losses to trade at 48 474 points at 17:00 CAT, down 0.41% for the day.

A few blue-chip stocks were trading in the green with notable movers of the day being British American Tobacco [JSE:BTI] and Reinet [JSE:RNI] which gained 3.16% and 1.76% respectively. The biggest example of Wednesday's volatility was probably seen in Naspers [JSE:NPN] which lost more than 6% to reach a session low of R2 680.01 per share. The stock paired all of its losses and eventually closed 2.6% firmer at R2 956.84 per share.

On the broader index Fortress B [JSE:FFB] and Accelerate Property Fund [JSE:APF] were among the top gainers after they closed 2.54% and 2.28% firmer. Other listed property stocks such as NEPI Rockcastle [JSE:NRP], Intu Properties [JSE:ITU] and Hammerson [JSE:HMN] gained 1.11%, 1.13% and 2.13% respectively.

Steinhoff International [JSE:SNH] came under pressure following the news of the revaluation of its property assets downwards. The stock lost 9.85% to close at R3.02 per share. Assore [JSE:ASR], Sanlam [JSE:SLM] and Stadio [JSE:SDO] were among the biggest losers of the day as they lost 8.51%, 5.96% and 5.92% respectively. Platinum miners Northam Platinum [JSE:NHM] and Lonmin [JSE:LON] traded weaker to close the day 4.02% and 2.17% softer.

Retailers and banking stocks came under pressure as a result of the weaker rand. Retailers such as Mr Price [JSE:MRP] and The Foschini Group [JSE:TFG] lost 3.92% and 4.24% respectively, while banking stocks such as Nedbank [JSE:NED] and First Rand [JSE:FSR] shed 2.53% and 0.94% respectively. PPC Limited [JSE:PPC] and WBHO [JSE:WBO] ended the day 3.13% and 2.01% weaker.

The blue-chip JSE Top-40 Index eventually closed 0.27% weaker, while the broader All-Share Index lost 0.48%. The Industrials Index ended the day firmer as it recorded gains of 0.5%. However, the Resources and the Financials Indices lost 1.39% and 1.68% respectively.

The rand traded softer against the US dollar to reach a session low of R11.94/$. At 17:00 CAT it had retraced back to trade at R11.90/$.

The US dollar traded relatively flat in Wednesday's session and as a result gold had a minor rally to peak to a session high of $1 348.30/Oz. It retraced significantly from its high to trade at $1 335.86/Oz at 17:00 CAT.

Contrary to the trend in gold, platinum and palladium were trading softer in Wednesday's session. At 17:00 CAT platinum was trading at $914.95/Oz, while palladium was recorded at $921.28/Oz.

Brent Crude also traded under pressure and at 17:00 CAT it was down 1.2% for the day, trading at $67.61/barrel.

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