Global sentiment weighs on JSE

LOCAL share prices gyrated but ended lower on Friday after US job growth slowed more than expected last month and the unemployment rate rose, easing worries of interest rates rising soon.

The Top 40 index fell 1.06% to 45 733, while the broader All Share index stumbled 0.93% to 50 917.78.

Decliners included logistics group Grindrod, which dropped 4.25% to R25.03 after it warned that interim earnings were likely to fall 30%-35%.

Grindrod said this was due to depressed shipping markets, the closure of its commodity-trading business and strikes in South Africa.

Overall, the market, which has scaled successive record peaks this year despite sluggish domestic economic growth, was moving to global flows and sentiment.

“This is not a reflection of investors thinking local issues, it is a reaction to international developments and data,” said Christie Viljoen of NKC Independent Economists.

The market trimmed losses in line with peers after the US jobs data were released, but then fell again, reflecting global volatility.

World stock markets traded lower after Thursday’s Wall Street sell-off, while the dollar dipped after the US jobs data eased investors’ worries that Federal Reserve policymakers were tilting towards raising interest rates.

US treasuries yields eased and gold prices jumped on July’s US employment data, which included a sixth successive month of job additions exceeding 200 000 and soft hourly wage increases.

“It’s a Goldilocks report for an economy that is steadily expanding but not lifting off. It will reinforce for now the Federal Reserve’s commitment to a gradualist policy approach,” said Mohamed El-Erian, chief economic adviser at Allianz in the US.

Wall Street was mixed in early trade. The Dow Jones industrial average was down 0.42% at 16 494.00, and the Standard & Poor’s 500 index was down 0.34% at 1 924.07. The Nasdaq Composite index dipped 0.57% to 4 344.98.

The MSCI All-Country World index was down 0.5% at 420.61.

Japan’s Nikkei index dropped to a one-week low, and European shares were off 1.32%.

The dollar, which has been climbing on hopes that US rates would rise sooner rather than later, moved lower. The US dollar index, which measures the greenback versus six major currencies, had traded near 10-month highs, but was down 0.32% at 81.195.

Spot gold prices gained 0.8% to $1 293.80 an ounce.

Brent crude oil fell to a two-week low, slipping below $105 a barrel as oversupply in the Atlantic basin and low demand outweighed worries over political tensions in the Middle East, North Africa and Ukraine. —