JSE closes lower as global sentiment turns negative on brewing trade war

The JSE closed weaker on Friday, as the possibility of a global trade war weighed on equity markets.

The Dow Jones was 1.3% lower at the JSE’s close, with European markets also weaker. The FTSE 100 was down 1.29% after UK Prime Minister Theresa May admitted that Brexit would reduce access to EU markets.

Concern about local political developments dampened sentiment, as the all share ended its second week of losses following almost euphoric trade in mid-February when President Cyril Ramaphosa took office.

A sharply weaker rand, hitting R12 to the dollar in intra-day trade, failed to provide any support to global diversified miners. Naspers was lower on retreating Asian markets, with Tencent falling 2% on the Hang Seng.

The threat of the expropriation of land without compensation also kept the local bourse under pressure.

Gold and property shares were the star performers on the day, with retailers providing some support. Risk-off sentiment affected banks and financials, despite the market warming to Nedbank’s upbeat annual results, as it looked past rising losses from its African activities.

Protectionist measures announced by US President Donald Trump’s administration spooked global markets. Trump said the US would impose tariffs on steel and aluminium imports, which might spark some retaliation from China and have the potential to start a global trade war. They came at a time when markets were still digesting less hawkish comments from US Federal Reserve chair Jerome Powell on Thursday.

Bravura analyst Ian Matthews said the possible negative effects from policy changes on the diminution of property rights should not be underestimated. "Expropriation without compensation could create a systemic risk for the South African banking and financing industry as a whole."

The all share closed 0.31% lower at 57,744.70 points on the day, and ended the week 1.65% lower. The top 40 lost 0.37%. The platinum index shed 1.56%, industrials 0.57%, banks 0.35% and financials 0.03%. The gold index rose 3.87%, property 1.11%, food and drug retailers 0.77% and general retailers 0.62%.

Anglo American lost 1.42% to R279.88.

Nedbank rose 1.64% to R294. It earlier reported annual headline earnings to end-December were up, but losses from its African activities grew to R810m from R287m in 2016.

Standard Bank lost 0.8% to R217 and Capitec 1.29% to R840.24.

Liberty Holdings dropped 2.93% to R130.90. It earlier reported a 9% increase in normalised headline earnings per share (HEPS) to R9.82 in the year to end-December.

Steinhoff plummeted 19.41% to a record low of R4.11.

Hyprop rose 2.27% to R112. On Friday it reported a rise in its interim dividend of 8.3%.

There was little respite for stocks in the Resilient stable, with it losing 2.27% to R62.54 and with Nepi Rockcastle losing 0.8% to R116.

Naspers was 1.37% lower at R3,251.58.

Mondi Ltd leapt 5.91% to R317.50. It earlier reported annual profit before tax rose 5% to €887m.