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Local bourse weaker as China threatens to walk away from trade talks

Musa Makoni

The JSE retreated on Friday as it took a leaf from Chinese markets which fell after Chinese state media highlighted that was little interest in resuming trade talks with the USA.

The impact of this new information was evident on the Shanghai Composite Index which fell 2.54%, while the Hang Seng lost 1.16%. Stocks in Japan advanced which saw the Nikkei close 0.89% firmer. In Europe, the trend remained mostly lower while a mixed picture ensued for the USA’s major indices. With both the USA and China trying to force each other’s hand in the trade negotiations, investors are increasingly becoming concerned that a deal will not be reached soon which leaves a lot of uncertainty for the financial markets.

On the JSE, Rebosis Property Fund [JSE:REB] continued to slump as it fell 3.97% to close at R1.21, while Hyprop Investments [JSE:HYP] lost 2.82% to close at R68.50. Bidvest [JSE:BVT] struggled on the day as it fell 4.32% to close at R199.49, while Imperial Logistics [JSE:IPL] dropped 2.96% to close at R60.69. The weaker rand saw rand sensitives retreating on the day as losses were recorded for Standard Bank [JSE:SBK] which lost 3.1% to close at R194.56, FirstRand [JSE:FSR] dropped 3.19% to close at R65.80, and Pick n Pay [JSE:PIK] weakened by 2.31% to close at R69.47. Other significant losses on the day were recorded for Dis-Chem Pharmacies [JSE:DCP] which lost 2.53% to close at R26.60, Nampak [JSE:NPK] which lost 2.93% to close at R10.62, as well as Tongaat Hulett [JSE:TON] which lost 2.76% to close at R20.80.

A couple of stocks managed to record significant gains on the day. Aspen Pharmacare [JSE:APN] climbed as high as R113.05 on the back of the news that final approvals had been received for the sale of its nutritionals business in New Zealand from authorities. However, the stock pulled back from this high to close 0.57% firmer at R104.80. Richemont [JSE:CFR] had a volatile session following the release of its full-year results. The stock closed 4.67% higher at R104.40 after having dropped to a session low of R98.01. Other significant gains were recorded for Lonmin [JSE:LON] which gained 5.89% to close at R11.50, Mondi PLC [JSE:MNP] added 2.4% to close at R313.25, and BHP Group [JSE:BHP] closed at R329.25 after gaining 1.03%.

The JSE All-Share index eventually closed 0.63% lower while the blue-chip JSE Top-40 index lost0.55%. The Resources index was the only index to record gains as it added 0.55%. The Industrials and Financials indices lost 0.52% and 2.06% respectively.

The rand retreated against the greenback as the USA announced the scrapping of steel and aluminum tariffs for Canada and Mexico. At 17.00 CAT the rand had retreated to trade 0.875 weaker at R14.40/$.

Brent crude traded mostly flat on the day and eventually it was recorded trading 0.01% weaker at $72.61/barrel just after the JSE close.

At 17.00 CAT, Gold was 0.87% weaker at $1275.50/Oz, Platinum was down 1.73% at $819.80/Oz, and Palladium had lost 1.22% to trade at $1319.80/Oz.