Retailers sink amid load-shedding
Retailers took a knock on Tuesday as load-shedding and unfavourable weather weighed on the sector, which posted its biggest one-day drop in more than a week.
The JSE’s general retailer index dropped 2.24% as SA entered its sixth day running of power failures, disrupting economic activity. The latest round of Eskom load-shedding fuelled concern about prospects for the economy, which the Reserve Bank expects to show 0.6% growth in 2019.
Miners rallied on rand weakness, resources gaining 2.08%, gold miners 3.64% and the platinum index 3.39%.
The rand weakened with manufacturing production contracting for a fifth successive month, by 0.8% year on year in October, data from Statistics SA showed earlier.
The US-China trade war heaped more pressure on the local currency and its emerging-market peers. At 6pm, the rand had weakened 1.27% to R14.8568/$, after hitting its worst level since November 20 during intraday trade. It had fallen 1.52% to R16.4766/€ and 1.49% to R19.5666/£. The euro was up 0.23% to $1.109.
The R2030 government bond also did poorly, with the yield rising 7.5 basis points to 9.235%. Bond yields move inversely to their prices.
Investors are counting the days before the US is due to impose a tariff hike on $156bn worth of Chinese goods, a move markets fear may prolong the signing of the first phase of a trade deal. Wall Street Journal reported on Tuesday that negotiators from the US and China are preparing to delay the tariff hike which is scheduled for December 15.
“There are four trading days left ... it looks like if the US president had to make the decision on new tariffs right now he would implement them,” said London Capital Group head of research Jasper Lawler.
Among other risk events on the global calendar, the US Federal Reserve began its final meeting for 2019 on Tuesday while the European Central Bank is set to meet on Thursday. Both are expected to keep interest rates unchanged amid fear of a global economic slowdown.
Shortly after the JSE closed, the Dow was flat at 27,935.82 points. In Europe, the FTSE 100 was down 0.2% and Germany’s DAX 30 0.3%, while France’s CAC 40 had gained 0.14%.
Gold was up 0.19% to $1,464.305/oz and platinum 2.75% to $918.92. Brent crude rose 0.56% to $64.42 a barrel.
The JSE all share gained 0.27% to 55,417.9 points, and the top 40 0.42%. Banks dropped 1.15% and financials 0.74%.
Nampak announced the appointment of Erik Smuts as the company’s new CEO from January 2020. Smuts will be replacing Andre de Ruyter, who is due to take over the reins at Eskom in January. Nampak’s share price rose 0.5% to R6.05.