MARKET WRAP: Banks lead JSE lower as markets await decision on Brexit extension

The JSE was lower on Thursday with banks leading losses, while global markets await the EU’s decision amid speculation that the it may give its verdict on a Brexit extension by Friday.

Despite reaching a deal with Brussels, UK Prime Minister Boris Johnson is awaiting a response from the EU regarding an extension to the October 31 Brexit deadline. Johnson has hinted at the possibility of a snap general election should the deadline be extended to next year.

On the US-China trade war front, White House trade adviser Peter Navarro said phase one of the deal between the US and China will include intellectual property rights, adding that he hopes China negotiates in good faith, according to Reuters.

 The European Central Bank (ECB) opted to keep the deposit facility rate unchanged at -0.5% on Thursday, in line with market expectations. This marked ECB president Mario Draghi’s final policy announcement before handing over the reins to former International Monetary Fund (IMF) head Christine Lagarde.

“A rapid round-up of market expectations show that another rate cut [by the ECB] is not anticipated before June 2020 and the quantitative easing should last until the third quarter of 2022. The first interest rate hike is not considered [to happen] any time before the fourth quarter of 2022,” said London Capital Group senior market analyst Ipek Ozkardeskaya. 

At 5.18pm, the rand was flat at R14.6461/$ while it had strengthened 0.29%to R16.2525/€ and 0.68% to R18.7895/£. The euro weakened 0.31% to $1.1097. 

Gold was up 0.7% to $1,502.19/oz, breaking through $1,500 for the first time in almost two weeks, and platinum added 0.51% to $925.06. Brent crude gained 0.61% to $61.41 a barrel.

The Dow was down 0.19% to 26,783.64 points, while, in Europe, the FTSE 100 had added 0.81%, France’s CAC 40 0.33%, and Germany’s DAX 0.54%. 

Earlier, the Shanghai Composite was flat while Hong Kong’s Hang Seng rose 0.87% and Japan’s Nikkei 225 0.55%.

The JSE all share fell 0.17% to 55,478.50 points and the top 40 0.24%. Banks fell 1.4% while gold miners gained 2.28%.

Standard Bank lost 2.13% to R171.28, Absa 1.68% to R160.20, FirstRand 1.46% to R66.75, and Nedbank 1.12% to R237.85.

Altron fell 2.97% to R26.45. The company said on Thursday that headline earnings per share (HEPS) from continuing operations  increased 4% to 73c in the six months to end-August.

Clicks rose 0.24% to R239.58. The retailer said on Thursday that its group turnover increased 7.2% in the year to end-August.

RDI Reit gained 1.74% to R24. The landlord said on Thursday that it reduced retail exposure to 35.3% in the year to end-August. 

Quantum Foods leapt 5.21% to R3.84. This despite the company saying on Thursday that it expects its HEPS to decrease by between 42% and 46%, to between 87.7c and 94.3c, for the 12 months to end-September.

Harmony led gains among larger gold miners, up 6.21% to R48.76, followed by Gold Fields rising 2.37% to R85.48, and AngloGold Ashanti 2.2% to R321.99.

- BusinessLIVE