Naspers drags down JSE amid Tencent tumble

Johannesburg - The JSE extended losses in late trade on Friday, following a weaker market open as it joined world markets amid a global tech stock meltdown. Tech stocks in particular took a hit during the US session. 

Media giant Tencent dropped 4.9% amid investigation by China’s online watchdog into reports of multiple violations, as the government tightens scrutiny over internet content.  China has increased pressure on internet media as it leads up to a political congress to be held later this month. 

According to analyst Mark Ingham, the Chinese investigation, typically murky, follows recent criticism from the Chinese government for fuelling gaming addiction among youngsters. The state controlled newspaper People’s Daily reckons the Honor of Kings mobile game is “poison” and spreading “negative energy”. 

In the run up, President Xi Jinping’s party is intent on muzzling any source of disruptive information and, according to Bloomberg, has shut livestreaming services and websites.

The drop in Tencent has heavily affected Naspers, the largest share on the JSE.  Naspers took a 2.83% dive to R2 764.53.

The JSE All Share Index fell 0.98% while the blue-chip Top 40 dropped 1.09%.  Gold stocks remained the shining light on the JSE, with the Gold Mining Index gaining 0.69%. Resources dropped 1.41%, followed by Industrials 0.99% and Financials 0.66%.

The price of gold has been buoyed by North Korea tensions as well as weaker than expected US inflation data. Gold moved higher to $1 287/oz as investors sought refuge from escalating tensions between North Korea and the US. 

Gold received an extra boost after data showed US consumer prices rose less than expected in July, pointing to benign inflation that could make the Federal Reserve cautious about raising interest rates again this year

Brent Crude edged marginally lower to $51.81 a barrel as OPEC announced that production from the group rose further in July, as exempt producers – Nigeria and Libya – and top exporter Saudi Arabia increased output.

* This report is from the Trading Desk at EasyEquities, Fin24's content partner on equities and market moves.

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