MARKET WRAP: JSE slips as global sentiment cools

Concern about an escalation in trade tension between the US and Europe, as well as weak economic data, kept the JSE under pressure on Tuesday, with local banks and retailers feeling the most strain.

The all share fell 0.65% to 58,092.5 points and the top 40 0.71%. General retailers lost 2.05% and banks 1.57%, while platinums added 2.79%.

Rand hedges performed well, although the rand was mixed as the JSE closed, having weakened against the euro while firming a little against the dollar.

US President Donald Trump said on Monday that talks between the US and China had already started, while other US officials warned that additional tariffs may be imposed on Europe amid a dispute over subsidies to aircraft manufacturer Airbus.

Additional tariffs against the EU would add to a slowdown in global economic growth, which is worrying financial markets,  Investec chief economist Annabel Bishop said in a note. Market focus is, however, on the pace of the US Federal Reserve's interest-rate cuts, with the rand unlikely to push past R14/$ without a 25 basis points decrease. That assumes that there are no negative local events until then.

Local news is in the back seat, although investors continue to watch for any news regarding Eskom, Mercato Financial Services analyst Nico du Plessis said. News that the EFF will abstain from all voting in municipalities — pointing to the possibility of hung councils, including in the economically important Gauteng — is not having a major effect.

International data is also disappointing, with a Chinese manufacturing purchasing managers' index (PMI) falling into contractionary territory in June. European PMIs for the same month have also disappointed, helping to entrench market expectations that looser monetary policy is on the way.

Domestic data so far this week has also been subdued, with the local Absa manufacturing PMI on Monday remaining in contractionary territory for the sixth consecutive month.

Shortly after the JSE closed gold was up 0.96% to $1,397.21/oz while platinum had fallen 0.5% to $828.14. Brent crude was down 3.41% to $62.94.

The Dow was up 0.44% to 26,717.43 points, while in Europe the FTSE 100 was up 0.88% and the CAC 40 0.17%, while the DAX 30 was flat.

Sasol fell 1.92% to R340.69, about a seven-year low. The company's share price has been battered amid cost overruns at its Lake Charles project in the US.

Rand hedge AB InBev gained 1.91% to R1,273.86 and British American Tobacco 0.86% to R514.67.

Brait gave up 3.24% to R18.50.

AngloGold Ashanti firmed 3.44% to R244.94.

Truworths slipped 5.03% to R68.85. It earlier confirmed UK media reports that it was seeking to restructure some of its UK subsidiary Office's long-term debt, citing a depressed trading environment in the UK. It said it did not believe that this restructuring would have a material effect on its operations in SA and the rest of Africa.

EOH firmed 1.85% to R19.82. It said earlier that it had sold 70% of its Construction Computer Software business to RIB Software for R444.4m.

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