JSE in second fall amid trade fears

The JSE closed weaker for the second consecutive session on Tuesday as uncertainty about global trade, against the backdrop of a hawkish stance from the US Federal Reserve, continued to rattle markets.

Analysts described the steady decline in emerging-market stocks over the past few months as a fullblown plunge as China extended its losses, from its 2018 high, to 20%.

The Dow opened flat after closing lower on Monday, weakening below the important 200-day moving average for the first time since June 2016.

Foreign investors have been dumping emerging markets, with the net outflows from local bond and equity markets amounting to R30.6bn in 2018. While this has been predominantly driven by a sharp sell-off in bonds, stocks have not come out unscathed, with inflows dropping from a peak of R35bn in early May, to the current R6.6bn. Last week’s total outflows amounted to R14.1bn.

Naspers and rand hedges Anheuser-Busch InBev and British American Tobacco, together with Capitec, led the losers on the day, on a volume basis.

The all share closed 1.14% lower at 55,254.7 points. The top 40 also lost 1.14%. The gold index shed 3.46%, property 1.77%, industrials 1.74%, platinums 1.33%, financials 0.79%, and banks 0.77%. Resources rose 0.04%.

Standard Bank lost 1.64% to R184.85 FirstRand gained 0.56% to R60.89. Sibanye-Stillwater plummeted 11.19% to R8.33 after reporting another death at one of its mines. Quilter rose 0.78% to R27.01 on its second day of trade, while Old Mutual Ltd, in its first trading day, closed at R29.40 after moving in a narrow range between R27.10 and R29.40.

The rand was range-bound, with a weaker bias. It was flat at R13.5461/$ soon after the JSE’s close.

Local bonds were steady, with the R186 last bid at 8.88% from 8.90% amid a lack of guidance from global bond markets. The US 10-year treasury yield was flat at 2.8815%.

Risk aversion remained foremost for the market, and the dollar looked set to continue to be one of the biggest beneficiaries of the safe-haven shift, Oanda analyst Craig Erlam said.

The top 40 Alsi futures index lost 1.03% to 49,408 points. There were 17,949, contracts traded, from 19,327.