JSE weakens on US-China tension
The JSE tracked weaker global markets following reports on Friday suggesting Beijing plans to institute new security laws in Hong Kong, and continued US-China hostility.
Beijing’s plans to tighten its grip on Hong Kong spurred outrage in the city and internationally. Opposition legislators warned that Hong Kong’s status as an international financial centre was in jeopardy as China announced its intention to “establish sound legal systems and enforcement mechanisms for safeguarding national security”.
Meanwhile, US President Donald Trump warned that the US would react strongly should the law be imposed, further fuelling investor fears of there being no end in sight to the US-China trade war, which enters its third year in July.
“The last thing the world needs right now is rising tension between the world’s largest economies, but that’s what we’re being treated to and it’s already taking its toll. US-China tension, Hong Kong protests — it’s 2019 all over again but much, much worse,” said Oanda senior market analyst Craig Erlam.
“In many ways, the [coronavirus] crisis has brought people and communities closer together, but unfortunately the same cannot be said of the world’s leaders.
“China has been questioned for its handling of the early stages of the crisis by many at this point but there has been no harsher critic than the Trump administration, in particular the president himself,” said Erlam.
The all share lost 1.72% to 50,147.21 points and the top 40 retreated 1.69%. Platinum miners dropped 4.27%, industrials 2.05%, financials 1.71% and resources 1.3%. Gold miners gained 2.51% and banks 0.1%.
Impala Platinum lost the most in its sector, dropping 4.86% to R113.37. Sibanye-Stillwater fell 4.74% to R34.96, Anglo American Platinum 4.19% to R1,087.50, Northam 2.33% to R97.04, and Royal Bafokeng 0.95% to R31.20
Despite Friday’s losses, the all share gained 1.04% for the week.
The rand, which firmed to its best level in almost two months on Thursday following a repo rate cut of 50 basis points to 3.75%, gave back some of those gains on Friday. It has now lost nearly 21% to the dollar so far in 2020.
At 5.30pm, it had weakened 0.69% to R17.7038/$, 0.24% to R19.2894/€ and 0.34% to R21.5745/£. The euro was down 0.47% to $1.0896.
Gold rose 0.36% to $1,732.85/oz and platinum 1.35% to $837.16. Brent crude fell 3.34% to $34.68 a barrel.