Markets react to trade war

The JSE closed in positive territory on Tuesday but investors remain cautious amid mixed messages from the US and China on the ongoing trade war.

The two economic superpowers have said they are optimistic about the negotiation process, Reuters reported.

The Chinese foreign ministry, however, said it was not aware of any telephonic talks between the US and Chinese negotiators, after US President Donald Trump said on Monday that officials from the two countries had communicated via phone.

The trade spat escalated last week after China imposed new tariffs of between 5% and 10% on $75bn (R1.15-trillion) worth of US imports.

In retaliation, the US threatened to impose a 25% to 30% tariff on $250bn (R3.84-trillion) worth of Chinese goods.

“Traders are so sensitive to US-China trade talks amid concerns over a slowing global economy that a headline or tweet can quickly cause a significant [markets] move,” London Capital Group head of research Jasper Lawler said.

Oanda senior market analyst Craig Erlam said: “The trade war is doing wonders for gold, which on Friday and Monday soared to new highs for the year as traders sought

. . . a traditional safe haven.”

The JSE all share gained 0.16% to 53,895.80 points and the top 40 gained 0.22%.

Banks lost 1.16% while industrials rose 0.26%, resources 0.65% and the platinum index 0.69%.

Absa fell 2.14% to R147.77, Nedbank 2.11% to R216.75, and Standard Bank 1% to R168.68.

Imperial Logistics jumped 8.9% to R51.86, after the company said its continuing headline earnings per share fell by 7% to 542c but its revenue rose by 6% to R49.7bn in the year to end-June.