Naspers, the JSE’s largest company by market capitalisation, led the JSE lower on Tuesday after the US defence department added Tencent, in which Naspers holds a nearly 25% stake, to a list of companies allegedly tied to China’s military.
The move sparked concerns over potential restrictions on advanced technology sharing, including semiconductors and artificial intelligence, deemed a threat to US national security. Tencent’s Hong Kong-traded shares plummeted 7.3% as the company vowed to contest the decision.
Tencent, the world’s largest video gaming company and operator of the Chinese messaging platform WeChat, plans to initiate a reconsideration process, seek talks with the US defence department and potentially take legal action to be removed from the list.
Naspers’ shares tumbled 10.10% to R3,740.04 while Prosus, Nasper’s international associate, fell 8.38% to R681.23.
The JSE all share lost 0.71% to 84,141 points and the top 40 1.01%.
Investors are awaiting the US December nonfarm payrolls report, scheduled for release on Friday, which will provide one of the first significant data points of the year.
Before Friday’s report, investors will closely watch other job reports, including the December ADP employment survey on Wednesday.
The week’s jobs data will provide investors with vital insights into the US labour market. So far, the economy has shown remarkable resilience. The Federal Reserve began cutting interest rates in September after inflation eased closer to its 2% target.
However, achieving the Fed’s 2% target may prove challenging as concerns rise that tariff plans and policies under the administration of Donald Trump’s second presidency could push inflation higher.
At 6.15pm, the Dow Jones industrial average was 0.24% firmer at 42,808 points, while markets were mixed in Europe.
The rand retreated in Tuesday’s session, surrendering gains of more than 1% from the previous session, as the dollar recovered its losses.
The dollar had initially slipped after a report by The Washington Post suggesting the Trump administration’s tariff plans might be less severe than expected.
This news had eased concerns about potential tariffs fuelling inflation and limiting the Fed’s ability to cut interest rates.
However, Trump denied The Washington Post’s report on Truth Social, stating that claims of his tariff plans being watered down were incorrect.
“The market remains on edge following conflicting reports in the Washington Post regarding universal tariffs, coupled with president-elect Trump’s pushback on such headlines, contributing to volatility in global markets,” said Wichard Cilliers, director and head of market risk at TreasuryONE.
At 6.22pm, the rand had weakened 0.7% to R18.68/$, 0.39% to R19.37/€ and 0.31% to R23.34/£. The euro was 0.34% weaker at $1.04.
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