GT247.com Trading Blog

Stocks softer global sentiment remains subdued

Written by Musa Makoni | 13 Nov 2019

The JSE retreated on Wednesday as it tracked weaker global sentiment which was ignited by Donald Trump’s threats of additional tariffs if no deal is reached in the current talks with China.

Trumps’s comments were much anticipated on Tuesday given the rally recorded last week on the back of Chinese led comments about a potential roll back on tariffs if trade talks go well. Market participants were also anticipating Fed chair, Jerome Powell’s testimony at Congress which is expected at 6pm. The Fed chairman reiterated that the Fed’s current policy is appropriate although prior noted risks remain. Concerns over the Hong Kong unrest also continue to deter markets particularly in Asia.

Locally, focus was on the release of South Africa’s retail sales numbers for the month of September. The data mostly disappointed as retail sales YoY only expanded by 0.2%, widely missing a forecast of 2.0%. Retail sales MoM advanced 0.5% barely missing an estimate of 0.6%.

The rand came under pressure as a result of this data as it reached a session low of R15.00/$. At 17.00 CAT, the rand was trading 0.4% weaker at R14.99/$.

Following the prior session’s rally, Telkom [JSE:TKG] came relinquished most of those gains as it closed 5.38% lower at R62.58. Blue Label Telecoms [JSE:BLU] which also had a surge on Tuesday, fell 4.27% to close at R2.69. Index heavyweight Naspers [JSE:NPN] came under considerable pressure as it lost 2.25% to end the day at R2106.53, while Prosus [JSE:PRX] fell 2.36% to close at R994.00. Financials hit a snag on the back of the weaker rand which saw declines being recorded for FirstRand [JSE:FSR] which dropped 1.96% to close at R67.53, while Standard Bank [JSE:SBK] lost 1.07% to close at R174.85. Other significant losers on the day included Brait [JSE:BAT] which fell 3.78% to close at R16.31, Multichoice Group [JSE:MCG] which lost 2.43% to close at R125.50, and Vodacom Group [JSE:VOD] which closed at R133.53 after losing 1.27%.

Harmony Gold [JSE:HAR] was buoyed by the release of a positive operational update which showed higher production and lower costs. The stock rallied 8.01% to close at R49.08. Other gold miners also recorded gains on the day which saw stocks such as DRD Gold [JSE:DRD] surge 6.36% to close at R6.69, and AngloGold Ashanti [JSE:ANG] gained 5.15% to close at R297.50. The Spar Group [JSE:SPP] bucked the downward trend recorded in other retailers as it was buoyed by the release of its full-year results which showed decent increases in earnings and turnover. The stock closed 5.55% to close at R209.00. Coal miner Exxaro Resources [JSE:EXX] added 3.83% to close at R130.00, while Kumba Iron Ore [JSE:KIO] rose 3.77% to close at R382.32.

The JSE All-Share index eventually closed 0.26% weaker while blue-chip JSE Top-40 index shed 0.19%. The Resources index managed to gain 0.95%, while the Industrials and Financials indices shed 0.67% and 0.82% respectively.

Brent crude held steady as it was recorded trading 0.34% firmer at $62.27/barrel just after the JSE close.

At 17.00 CAT, Palladium was up 0.62% at $1710.25/Oz, Platinum was 0.31% firmer at $871.90/Oz, and Gold had risen 0.46% to trade at $1463.71/Oz.

 

Disclaimer:

Any opinions, news, research, reports, analyses, prices, or other information contained within this research is provided by GT247.com at GT247 (Pty) Ltd t/a GT247.com (“GT247.com”) as general market commentary, and does not constitute investment advice for the purposes of the Financial Advisory and Intermediary Services Act, 2002. GT247.com does not warrant the correctness, accuracy, timeliness, reliability or completeness of any information which we receive from third party data providers. You must rely solely upon your own judgment in all aspects of your trading decisions and all trades are made at your own risk. GT247.com and any of its employees will not accept any liability for any direct or indirect loss or damage, including without limitation, any loss of profit, which may arise directly or indirectly from use of or reliance on the market commentary. The content contained within is subject to change at any time without notice.