Gloomy IMF global outlook dampens the JSE

The JSE closed softer on Tuesday along with other major global indices as pessimism engulfed the markets after the IMF trimmed its global growth forecasts.

The gloomy forecasts reflect what investors have feared could be the implications of trade wars, Brexit and weaker corporate earnings. Locally, more evidence has surfaced with regards to the deteriorating spending power of consumers as Massmart [JSE:MSM] and Shoprite [JSE:SHP] released relatively weaker sales updates for the last quarter.

China is already taking measures to minimize the impact of low growth on its economy by through a variety of measures ranging from tax cuts to relaxed corporate credit lines.

On the JSE, the trend was mostly lower after the major Asian indices closed weaker on Tuesday. In Hong Kong, Tencent Holdings came under pressure after the company’s games failed to feature on Chinese regulators’ latest game approval list. The stock closed 1.24% weaker at $HK335.80

Massmart was the day’s biggest loser mainly on the back of its trading statement. The stock slumped 20.96% to end the day at R90.65. Losses in Shoprite were moderate as the stock shed 0.37% to close at R185.32. Dis-Chem Pharmacies [JSE:DCP] couldn’t catch a reprieve as it lost another 3.99% to end the day at R25.00, while Clicks [JSE:CLS] retreated by 0.78% to close at R194.99 despite releasing a relatively decent trading update.

Diversified miner, South32 [JSE:S32] weakened by 2.02% to close at R32.97, BHP Group [JSE:BHP] lost 1.64% to R283.23, and Glencore [JSE:GLN] closed 1.36% weaker at R52.32.

Of the day’s top gainers, Brait [JSE:BAT] managed to claw back some of its gains to end the day at R27.50 after adding 4.56%. Gold miners were trading mostly firmer on the day. Harmony Gold [JSE:HAR] added 2.47% to R24.44, AngloGold Ashanti [JSE:ANG] firmed by 2.4% to R170.00, and Gold Fields [JSE:GFI] gained 3.86% to R51.06. Bid Corporation [JSE:BID] firmed by 1.48% to close at R275.00, whilst Sappi [JSE:SAP] managed to post gains of 0.93% to close at R77.80.

The JSE All-Share index eventually closed 0.31% weaker, while the JSE Top-40 index lost 0.4%. The Industrials and Resources lost 0.4% and 0.43% respectively, however the Financials index barely managed gains of 0.3%.

At 17.00 CAT, Gold was up $1281.82/Oz, Platinum was down 0.75% to trade at $790.84/Oz, and Palladium was down 1.23% at $1346.09/Oz.

Brent crude retreated from its overnight highs which saw it trading 2.09% lower at $61.43/barrel just after the JSE close.

Bitcoin was up 1.32% to trade at $3625.00/coin, while Ethereum had gained 1.42% to $119.40/coin.

22 January (002)

Brent Crude
All Share
Top 40
Financial 15
Industrial 25
Resource 10
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Do you think it was a good idea for the government to approach the IMF for a $4.3 billion loan to fight Covid-19?
Please select an option Oops! Something went wrong, please try again later.
Yes. We need the money.
11% - 988 votes
It depends on how the funds are used.
74% - 6580 votes
No. We should have gotten the loan elsewhere.
15% - 1376 votes