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)

ZAR/USD
17.40
(-0.01)
ZAR/GBP
22.73
(+0.11)
ZAR/EUR
20.57
(+0.06)
ZAR/AUD
12.45
(-0.01)
ZAR/JPY
0.16
(-0.07)
Gold
1953.22
(-0.19)
Silver
27.19
(-0.94)
Platinum
953.00
(-0.62)
Brent Crude
45.01
(-1.03)
Palladium
2159.00
(-0.46)
All Share
57419.46
(+0.00)
Top 40
53082.08
(-0.08)
Financial 15
10227.06
(+0.86)
Industrial 25
75743.15
(-0.61)
Resource 10
59161.88
(+0.29)
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