The JSE was little changed on Monday, with its global peers mixed as China’s widening tech sector crackdown weighed on risk sentiment. Miners gained the most on the day, while Naspers dragged the local bourse lower.
Tencent, which influences the JSE via the Naspers stable, fell as much as 9.3% in intraday trade on the Hang Seng, before closing 7.72% weaker at HK$490 after Chinese competition authorities ordered the company to stop the practice of exclusive music licensing rights. It was also given a small fine, similar to those imposed on other tech firms guilty of the same offence.
Naspers fell the most since March 2020 dropping 7.18% to R2,748.01, and Prosus 7.6% to R1,279.63. The stable owns 29% of Tencent.
The JSE all share ended the day flat at 68,051 points, with the top 40 also little changed. Precious metals rose 3.93%, resources 3.68% and industrial miners 3.66%. Industrials fell 2.38%, with the bulk coming from the declines in Naspers and Prosus. Food producers lost 2.28% and retailers 1.77%.
Earlier, the Shanghai Composite dropped 2.34% and Hong Kong’s Hang Seng 4.09%, while Japan’s Nikkei 225 firmed 1.04%.
The rand weakened to a four-month low in intraday trade, to R14.99/$, also a victim of risk sentiment. By 6.10pm, however, it had recovered somewhat and was 0.44% firmer at R14.7756/$ and 0.15% stronger at R17.4524/€. It fell 0.28% to R20.4389/£. The euro was 0.36% firmer at $1.1809.
“The rand fell further on Monday as the negative bias continues, driven by risk-averse global financial market sentiment on the spread of the Delta variant, with emerging-market currencies afflicted by the risk-off mood,” said Investec chief economist Annabel Bishop.
Last week’s lower-for-longer interest rate comment by the SA Reserve Bank saw the rand fall about 1% on both Thursday and Friday.
TreasuryONE currency strategist Andre Cilliers said the rand’s weakness could be attributed to both the Reserve Bank’s lower-for-longer statement on interest rates and concern over global growth due to Covid-19. “A break through R15 is very possible.”
Gold lost 0.18% to $1,798.74/oz, while platinum gained 0.62% to $1,066.13. Brent crude fell 0.3% to $73.96 a barrel.
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