SA stocks follow global markets in down trend

SOUTH African share prices followed global stock markets lower on Friday as traders grappled with an outage of Bloomberg financial terminals and fears of a regulatory clampdown on trading in China.

Media and e-commerce group Naspers led the decline, falling 3.4%. This group’s fortunes are closely tied to those of China’s Tencent Holdings, in which it holds a minority stake. Tencent has been a lucrative bet for Naspers, but its share price fell 1.2% on Friday.

The markets were spooked by reports of a crackdown in China on over-the-counter margin trading because this could staunch the flow of money into Chinese exchanges.

Traders said Naspers was due for a pullback after surging past R2 000 for the first time on Monday.

“People think the share has overshot a little; [gone] too high too quickly,” said Cratos Capital’s Greg Davies.

Petrochemicals group Sasol, which is repatriating 340 South Africans working at its projects in Mozambique because of fears for their safety, fell 2.4%. Sasol said that as a result of the repatriations work at some of its projects had been halted temporarily.

The benchmark Top 40 index ended 1.07% lower at 47 491, and the broader All Share index ended almost 1% down at 53 734.

Global equity markets fell on news of the crackdown on margin lending in China.

The dollar gained on rising US consumer price figures that should keep the Federal Reserve on track to raise interest rates this year.

China’s securities regulator warned investors to be cautious as Chinese shares hit seven-year highs after seven weeks of gains. Retail investors are borrowing record amounts of money to buy stock, which has pushed trading volumes to new highs.

Stocks in Europe and on Wall Street fell more than 1% on the Chinese news and on worries that Greece might run out of money as debt repayments loom.

MSCI’s all-country world index of equity performance in 46 countries fell 0.98%, and the FTSEurofirst 300 index of top European shares fell 1.6% to 1 608.93.

The Dow Jones industrial average fell 1.54% to 17 827.57. The S&P 500 slid 1.2% to 2 079.64 and the Nasdaq Composite lost 1.58%, to 4 928.91.

US consumer prices rose 0.2% last month, propelled by higher costs for petrol and housing. Closely watched core consumer prices rose 1.8% year on year, edging closer to the Fed’s 2% target.

The dollar was up marginally against the yen at ¥119.00. The euro rebounded, rising 0.24% at $1.0786.

Brent crude for June was up 13c at $64.11 a barrel. —