Stock rout deepens as investors flee to safe-haven assets

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The JSE fell along with other global indices on Thursday as investors fled to safe-haven assets on the back of increasing concerns over the current trade dispute between China and the US.

It was a sea of red across market counter indicators as equity indices traded weaker from Asia to the US. The JSE took a leaf from earlier trading in Asia where the Hang Seng fell 1.58% with Tencent Holdings dropping 3.83% to close at $HK326.00 on that bourse. In Japan the Nikkei lost 0.62% while in mainland China the Shanghai Composite Index fell 1.79%.

Locally, the South African Reserve Bank kept the repo rate unchanged at 6.75% as was widely anticipated. The governor indicated that the MPC was happy with the current level of inflation and that it would endeavor to see inflation closer to the mid-point of its target band of between 3% and 6%.

The blue-chip JSE Top-40 index lost 2% while the JSE All-Share Index fell 1.89%. Industrials fell 1.91%, Resources dropped 1.24% and Financials plummeted 2.68%.

Massmart [JSE:MSM] released a weaker trading statement for its first 20 weeks of the current financial year. The stock fell to a low of R63.80 before closing 13.14% lower at R67.75.

Brait [JSE:BAT] also released a trading statement for its full financial year which highlighted that the company expected its net asset value to decrease by between 23.4% and 27.0%. Brait shares eventually closed 12.42% weaker at R20.45.

Steinhoff International [JSE:SNH] struggled on the day as it lost 4.93% to close at R1.35, while Aspen Pharmacare [JSE:APN] fell below R100 per share before it closed at R99.47 after losing 4.62%.

Sasol [JSE:SOL] could not catch a reprieve as it lost another 5.72% to end the day at R353.55, while Discovery Ltd [JSE:DSY] weakened by 4.56% to close at R134.28.

Gains were modest on the day with Sibanye Stillwater [JSE:SGL] adding 1.77% to close at R12.05, and Gold Fields [JSE:GFI] gained 1.39% to end the day at R55.51.

Other gold miners also advanced with Harmony Gold [JSE:HAR] adding 1.43% to close at R24.10, and AngloGold Ashanti [JSE:ANG] gaining 1% to close at R171.34. SA Corporate Real Estate [JSE:REB] staged a minor rebound end the day at R3.02 after gaining 2.03%.

The US dollar surged in Thursday's session following the release of the Fed FOMC meeting minutes on Wednesday. This saw the rand fall to a session low of R14.53/$ before it strengthened somewhat to trade 0.77% weaker at R14.47/$ at 17.00 CAT.

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Brent crude extended its decline as more evidence of increased US crude stockpiles surfaced. The commodity was down 4.485% to trade at $67.81/barrel just after the JSE close.

At 17.00 CAT, Gold was 0.985% firmer at $1285.88/Oz and Platinum 0.18% weaker at $802.35/Oz, while Palladium lost 0.31% to trade at $1313.95/Oz.

* Musa Makoni is a trading specialist at Purple Group.

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Rand - Dollar
14.85
-1.2%
Rand - Pound
20.49
-0.4%
Rand - Euro
17.30
-0.2%
Rand - Aus dollar
11.09
-0.2%
Rand - Yen
0.13
-0.1%
Gold
1,793.05
0.0%
Silver
24.33
0.0%
Palladium
2,023.00
0.0%
Platinum
1,043.50
0.0%
Brent Crude
85.53
+1.1%
Top 40
60,525
+1.7%
All Share
67,051
+1.5%
Resource 10
62,969
+2.5%
Industrial 25
86,659
+1.4%
Financial 15
13,849
+0.2%
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