MARKET WRAP: JSE slips below 56,000 points led by Naspers

The JSE fell sharply on Monday, weighed down by risk-off trade on global markets, with local losses once again led by market heavyweight Naspers.

Naspers fell 3.29% to R3,210, tracking losses in Hong Kong-listed Tencent, as investors shied away from technology stocks.

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Just days after US president Donald Trump signed an executive order to blacklist Huawei from the US market, Google suspended technology co-operation with the telecoms company, further escalating tension between the US and China.

Investors now fear that the trade conflict will get worse before it gets better. China is unlikely to take Google’s suspension of business with Huawei lying down, London Capital Group analyst Jasper Lawler said.

The turmoil on the JSE did not affect the rand, however, which was 0.36% firmer at R14.3561/$ as the share market closed.

The all share lost 1.01% to 55,617 points and the top 40 fell 1.06%. Platinums fell 2.07%, industrials 1.67% and general retailers 0.85%. Banks added 0.34% and gold miners 1.25%.

This week is a busy one, with the US Federal Reserve set to release minutes from its last meeting on Wednesday. Also on Wednesday, South African inflation data for April is due, while the Reserve Bank will make its current stance on monetary policy known on Thursday.

Some local focus is also on domestic politics, with investors cautious ahead of the announcement of President Cyril Ramaphosa’s new cabinet.

Eskom issues also remain, amid reports on Monday that the government was still considering absorbing some of the embattled power utility’s debt, which could be viewed negatively by ratings agencies.

Earlier, Eskom said its unaudited debt to end-March stood at R440bn, of which R273bn is government guaranteed.

Pioneer Foods slumped 11.03% to R73.90, after the company reported that its adjusted headline earnings fell 15% for the six months ended March.

Barloworld added 1.83% to R128.75, after saying that its headline earnings per share increased 14.1% for the six months ended March.

Anglo American Platinum fell 1.11% to R697 after it laid off about half of the underground workforce at its Mototolo mine following an unprotected strike.

Adcorp lost 1.59% to R23.50, despite it reporting earlier that its net profit after tax jumped 147% to R467m in the year to end-February, with the company returning to profitability. Cash generated rose 28% compared to the corresponding prior period, with the company declaring a dividend of 96.10c per share, having opted not to declare one in the prior period.

Shortly after the JSE closed, the Dow was 0.11% weaker at 25,737.97 points, while in Europe, the FTSE 100 had fallen 0.46%, the CAC 40 1.31% and the DAX 30 1.33%.

At the same time, gold was flat at $1,277.80/oz while platinum had fallen 0.78% to $813.30.

Oil continued its push higher on Monday after oil-cartel Opec indicated it intended to maintain recent production cuts until the end of the year. Prices have risen amid escalating tension between the US and Iran over the latter’s nuclear programme. Brent crude was last seen 0.79% higher at $72.66 a barrel.

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