Trade-war fear weakens JSE

The JSE closed in negative territory on Tuesday as global markets remained mixed on worries that trade tension could continue into 2020.

US President Donald Trump said on Tuesday that there could be a trade deal with China after the US election in 2020, stoking investor fear about the effects on the global economy.

France and the EU say that they are ready to retaliate if Trump imposes a 100% tariff on $2.4bn (R35.25bn) in French imports, Reuters reports. France The’ s US tax on said digital on services Monday could that knock US tech companies, and that it might slap tariffs on a range of French goods such as cheese, handbags and champagne.

“Trump has also been eager to take aim at Europe, but has maybe been deterred from doing so as the risks of fighting a trade war on two fronts going into an election are too severe,” said Oanda senior market analyst Craig Erlam. Trump also said on Monday that the US would restore tariffs on steel and aluminium imports from Argentina and Brazil.

Shortly after the JSE closed, the Dow was down 1.35% at 27,402.44 points. In Europe, the FTSE 100 lost 1.69% and France’s CAC 40 1.24%, while Germany’s DAX was flat.

Earlier, the Shanghai Composite rose 0.31% while Hong Kong’s Hang Seng fell 0.2% and Japan Nikkei 225 0.64%.

Despite reaching a five-week high of R14.51/$ earlier on Tuesday, the rand pared gains, weakening to R14.69/$ in intraday trade after GDP contracted 0.6% in the third quarter from growth of 3.2% in the second. The median forecast according to Bloomberg was for GDP growth to have been 0%.

“Mixed fourth-quarter economic trends now pose a risk that average growth in 2019 may therefore turn out to be even lower than 0.5%. Growth forecasts for 2020 will in any case need to be revised downward, possibly closer to 1%,” said North West University Business School economist Raymond Parsons.

At 5.18pm, the rand had weakened 0.56% to R14.6271/$, 0.58% to R16.2068/€ and 0.95% to R19.0034/£. The euro was flat at $1.1079.

Gold was up 1.07% at $1,478.096/oz and platinum 1.2% at $909.41. Brent crude eased 0.54% to $60.58 a barrel.

The JSE all share fell 0.6% to 54,485.40 points and the top 40 0.64%. Resources fell 0.94% and industrials 0.93%.

Curro Holdings said on Tuesday that it had acquired three new schools in Gauteng as part of its plan to increase its presence in the province. The group’s share price was down 0.8% at R16.41.

Grand Parade Investments gained 4% to R3.80. It said on Tuesday that its chair, Hassen Adams, would retire at the end of January 2020.