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Stock rout deepens

Musa Makoni

The JSE fell along with other global indices on Thursday as investors fled to safe-haven assets on the back of increasing concerns over the current trade dispute between China and the USA.

It was a sea of red across market counter indicators as equity indices traded weaker from Asia to the USA. The JSE took a leaf from earlier trading in Asia where the Hang Seng fell 1.58% with Tencent Holdings dropping 3.83% to close at $HK326.00 on that bourse. In Japan the Nikkei lost 0.62% while in mainland China the Shanghai Composite Index fell 1.79%.

Locally, the South African Reserve Bank kept the repo rate unchanged at 6.75% as was widely forecasted. The governor indicated that the MPC was happy with the current level of inflation and that it would endeavor to see inflation closer to the mid-point of its target band of between 3% and 6%.

On the JSE, Massmart [JSE:MSM] released a weaker trading statement for its first 20 weeks of in the current financial year. Resultantly the stock fell as much as R63.80 be fore it closed 13.14% lower at R67.75. Brait [JSE:BAT] also released a trading statement for its full financial year which highlighted that the company expected its net asset value to decrease by between 23.4% and 27.0%. The stock eventually closed 12.42% weaker at R20.45. Steinhoff International [JSE:SNH] struggled on the day as it lost 4.93% to close at R1.35, while Aspen Pharmacare [JSE:APN] fell below R100 per share before it closed at R99.47 after losing 4.62%. Sasol [JSE:SOL] could not catch a reprieve as it lost another 5.72% to end the day at R353.55, while Discovery Ltd [JSE:DSY] weakened by 4.56% to close at R134.28.

Gains were modest on the day with significant gains being recorded for Sibanye Stillwater [JSE:SGL] which added 1.77% to close at R12.05, and Gold Fields [JSE:GFI] which gained 1.39% to end the day at R55.51. Other gold miners also advanced on the day which saw Harmony Gold [JSE:HAR] add 1.43% to close at R24.10, and AngloGold Ashanti [JSE:ANG] gain 1% to close at R171.34. SA Corporate Real Estate [JSE:REB] staged a minor rebound as it closed at R3.02 after gaining 2.03%.

The blue-chip JSE Top-40 index lost 2% while the JSE All-Share Index fell 1.89%. A rout ensued on the local bourse as all the major indices closed significantly lower. Industrials fell 1.91%, Resources dropped 1.24% and Financials plummeted 2.68%.

The US dollar surged in today’s session following the release of the Fed FOMC meeting minutes on Wednesday. This saw the rand fall to a session low of R14.53/$ before it retraced to trade 0.775 weaker at R14.47/$ at 17.00 CAT.

Brent crude extended its declines as more evidence of increased US crude stockpiles surfaced. The commodity was down 4.485 to trade at $67.81/barrel just after the JSE close.

At 17.00 CAT, Gold was 0.985 firmer at $1285.88/Oz, Platinum was 0.18% weaker at $802.35/Oz, and Palladium had lost 0.31% to trade at $1313.95/Oz.


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