The JSE closed softer on Monday despite a stock surge in Asia and rallies in other global equity markets on news that U.S. President Donald Trump postponed the date for increasing tariffs on Chinese imports.
Asian markets soared on the news. The Shanghai Composite Index rallied 5.95%, and the Hang Seng gained 0.5%. The gains in Europe were milder, but the trend was mostly higher on the day.
The news also caused the U.S. dollar to retreat, which pushed the rand and other emerging market currencies to trade firmer.
The rand continues to benefit from the budget policy statement released last week. The decision to offer Eskom a bridging loan instead of bailing the company out may placate Moody’s Investors Services.
At the moment, Moody’s is the only ratings agency that holds South Africa’s sovereign credit rating above junk status. A downgrade would trigger a sharp selloff of bonds and put pressure on the rand.
On the JSE, retailers saw gains on the day thanks to a firmer rand. Massmart gained 2.03%, closing at R90.80; Pick n Pay gained 1.61%, closing at R69.30; and Mr Price closed at R219.53, up 0.7%. South32 ended the day at R38.48, up 0.97%; and Northam Platinum gained 2.95% to close at R53.38.
Super Group inched up 0.88% to trade at R34.35.
The day’s biggest gainer was Blue Label Telecoms, which gained 8.99% to close at R5.94. Bid Corporation gained 1.59% to close at R299.82.
Grindrod lost 6.34%, closing at R7.68. Liberty Two Degrees fell 2.05% to close at R7.15.
Property stocks struggled on the day, with most trading lower. Delta Property Fund lost 8.84% to close at R2.99. SA Corporate Real Estate declined 1.08% to R3.66, and Rebosis Property Fund was down 4.62% to close at R1.86.
Miners struggled on the day. Harmony Gold fell 2.11% to close at R28.29, and Angle American PLC fell 1.53% to close at R367.97. Exxaro Resources declined 2.38% to close at R150.06, and Tongaat Hullett fell 3.16% to close at R35.84.
The JSE All-Share Index closed 0.2% lower on the day, and the JSE Top-40 index also fell 0.2%. The Resources index saw the biggest loss, falling 1.29%. The Financials and Industrials fell 0.4% and 0.11% respectively.
In Europe, the FTSE 100 was flat, and the CAC 40 rose 0.42%. The DAX 30 gained 0.67%, and the Dow inched up 0.65%.
Gold gained 0.34% to trade at $1,331.69/ounce, and platinum rose 0.86% to trade at $852.