JSE flat amid US recession fears

The JSE gave up earlier gains to close flat on Thursday, as global markets came under pressure from disappointing US data. A softer rand had earlier supported miners and rand hedges, as the local currency weakened above the psychologically important R14/$ mark for the first time since early January.

The JSE gave up earlier gains to close flat on Thursday, as global markets came under pressure from disappointing US data.

A softer rand had earlier supported miners and rand hedges, as the local currency weakened above the psychologically important R14/$ mark for the first time since early January. The currency’s three-month implied volatility a measure of risk rose to 17.45% on Thursday afternoon, eclipsing the Turkish lira’s 17.1%.

Global trade was initially risk-on, with markets watching as two days of US-China trade talks got under way in Beijing. However, sentiment turned negative after US retail sales in December fell 1.2% month on month, the worst decline in nine years. The figure sparked recession fears, reported Dow Jones Newswires.

The all share edged 0.03% lower to 54,527.1 points, while the top 40 gave up 0.08%. Banks fell 2%, food and drug retailers 2.1% and financials 1.54%.

But platinums added 2.89% and gold miners advanced 2.33%.

Analysts said a series of disappointing domestic data releases could put SA’s growth forecast for 2019 at risk. Trade is also expected to be cautious ahead of next week’s budget policy statement.

“We are concerned about the outlook for 2019 as rising input costs, low commodity prices, poor electricity generation and slowing Chinese growth present risks to the mining sector,” said FNB chief economist Mamello Matikinca-Ngwenya.

South32 gained 2.41% to R37.76, having said earlier that headline earnings per share (HEPS) in the six months to end-December grew 12.5% from the same period in 2017.

Sibanye-Stillwater gained 1.6% to R14.65 after saying it may cut more than 6,000 jobs as it battles a threemonth strike at its gold operations.

Rand hedge British American Tobacco gained 1.33% to R513. Clicks slumped 4.27% to R177. Lighthouse Capital formerly known as Greenbay fell 0.15% to R6.88. It reported that it has swung into a headline loss of 7.76 euro cents per share in the three months to endDecember, from HEPS of 4.52 euro cents in the prior comparative period.

Curro gave back 5.24% to R25.70. It had surged 9.35% on Wednesday.

Italtile was flat at R13.29, despite earlier reporting that trading profit was up 35% to R968m in the six months to end-December.

Shortly after the JSE closed the Dow was down 0.92% at 25,308.78 points. The FTSE 100 and CAC 40 were flat, while the DAX 30 had lost 0.62%.

At the same time, gold was up 0.32% to $1,310.62/oz while platinum had lost 0.66% to $780.71. Brent crude was down 0.25% to $63.52 a barrel.

The rand was 0.99% weaker at R14.20/$.