JSE closes lower ahead of US jobs data and renewed concern of global trade war

The JSE closed lower on Thursday ahead of the release of crucial economic data in the US‚ which will affect the trajectory of the rand.

Amid uncertainty about the direction of the local currency‚ investors largely remained on the sidelines in thin-volume trade for a second consecutive session.

A weaker rand tends to support rand hedges on the JSE‚ while a stronger rand helps banks and retailers.

Risk-off trade gathered some momentum in late trade. Early strength in the rand‚ with the local currency firming to R13.5273 to the dollar‚ supported banks and financials‚ but fizzled out in later trade‚ with property stocks remaining strong.

The Dow was 0.27% higher at the JSE’s close after being closed on Wednesday for a public holiday. European markets were up on a weaker euro‚ following some indications that the European Central Bank (ECB) may look to raise interest rates quicker. That is currently scheduled to take place at the end of 2019.

Minutes from the previous meeting of the US Federal Reserve will be released after the JSE’s close. Gains in the euro were capped in late trade as the possibility of underlying hawkish views expressed at the Fed meeting were set to support the dollar.

US ADP jobs numbers‚ released on Thursday and the precursor to Friday’s nonfarm payroll numbers‚ showed that 177‚000 private-sector jobs were created in June. Nonfarm jobs‚ a broader measure of job creation in the US‚ were forecast to come in at 195‚000 from 223‚000 in the previous month.

The US is set to impose a 25% tariff on up to $34bn worth of Chinese products on Friday. Emerging-market currencies were likely to be caught in the crossfire should China retaliate.

A Chinese official warned on Thursday that planned US tariffs on Chinese products would hurt companies around the globe as many of the goods targeted by the US administration were made by foreign companies in China.

"The US was firing shots to the world‚ including [at] itself‚" said Gao Feng‚ a spokesperson for China’s commerce ministry.

But many investors say that a full-blown trade war could still be prevented and the measures would not severely affect the global economy‚ Dow Jones Newswires reported.

The all share closed 0.32% lower at 57‚414 points and the top 40 lost 0.35%. Banks shed 0.71%‚ industrials 0.66%‚ the gold index 0.56% and food and drug retailers 0.5%. Property rose 1.05%‚ resources 0.64% and the platinum index 0.13%.

Glencore rose 1.33% to R58.56. It earlier announced that it would buy back some of its own shares.

Sasol added 0.93% to R505.64..

Anglo American Platinum shed 2.22% to R353.32. The group announced on Thursday morning that it had disposed of its 33% interest in the Bafokeng Rasimone mine for R1.86bn.

FirstRand shed 0.89% to R65.59.

Steinhoff plummeted 9.09% to R1.60.

Growthpoint rose 2.04% to R27.04‚ Redefine 1.62% to R10.68 and Nepi Rockcastle 0.52% to R123.42.

Naspers lost 0.56% to R3‚388.86.