JSE starts second quarter weaker

The JSE started the second quarter on a negative note on Tuesday, as global trade war concerns and a faltering recovery in tech stocks kept the market on the back foot.

Market sentiment was further dampened after the latest Absa purchasing managers’ index dropped back below the neutral 50-point mark in March, after encouraging improvements during the first two months of 2018. The index shed 3.9 points to 46.9 from 50.8 in February.

Mining stocks led the declines as the dollar recorded marginal gains against the euro. But shares fell across the board, with banks also sharply lower.

European markets ended the day down, but the Dow was 0.7% up at the JSE’s close.

The all share lost 1.1% to 54,864.80 points and the top 40 1.26%. The gold index shed 2%, the platinum index 1.77%, resources 1.5%, banks 1.46%, financials 1.29% and industrials 0.84%.

A promising recovery among property stocks — with Resilient gaining 3% — fizzled out by the close with Growthpoint off 1.44% at R28.

Naspers also battled to sustain a firmer bias throughout the day, closing 0.34% lower at R2,882. Rand hedge Anheuser-Busch InBev lost 2.84% to R1,269.82 and British American Tobacco shed 1.8% to R684.

Gold Fields dropped 4.73% to R45.71 and DRD Gold 4.85% to R3.14.

The rand was range-bound on the day, despite the dollar’s gains on the euro in late trade. At the JSE’s close it was slightly firmer at R11.8092/$ from R11.8443/$. The dollar’s performance against the rand’s emerging market peers was mixed, with the greenback strengthening against the Turkish lira but losing ground to the Brazilian real and Mexican peso.

The next major risk event for currencies this week is the release of US nonfarm payrolls on Friday.

Local bonds were little changed on Tuesday, with the R186 last bid at 8.015% from 7.99%. The US 10-year bond was unchanged at 2.7774%. The market has priced in three rate increases in the US in 2018, but the Fed has refrained from adopting an overly hawkish tone in its recent statements.

The top 40 Alsi futures index lost 1.41% to 48,690 points. The number of contracts traded was 25,386 from Thursday’s 26,347.