JSE opens weaker as Trump intensifies trade war with China

The JSE opened weaker on Thursday in renewed risk-off trade amid new signs of an escalating global trade war with China as the US Federal Reserve kept interest rates unchanged‚ as expected.

Naspers was one of the early losers‚ dropping 2.45% to R3‚189.15 soon after the opening. It ended July 7% weaker.

US president Donald Trump has told American officials to consider raising proposed tariffs on $200bn in Chinese goods to 25%. Asian markets were weaker in response‚ with the Hang Seng losing more than 2%. The Nikkei 225 shed 1.03%.

The Dow closed 0.32% lower on Wednesday‚ with US stocks closing mostly lower after the Fed’s decision. Fresh worries over US-China trade friction dampened sentiment‚ although positive results from Apple buoyed the tech sector and helped the Nasdaq to buck the weakening trend‚ Dow Jones newswires reported.

The Fed offered an upbeat assessment of the US economy’s performance‚ suggesting another interest-rate increase is likely at its next meeting.

The Fed repeatedly emphasised the economy’s strength in a statement released after its two-day policy meeting. It offered nothing to dispel market expectations that it would deliver its third interest-rate increase of the year when it meets in late September‚ the newswires reported.

The rand was again under pressure after recovering from Wednesday’s rout following President Cyril Rampahosa’s announcement that the ANC would seek to amend the Constitution to allow for the expropriation land without compensation.

It was trading at R13.31 to the dollar from R13.2298 soon after the JSE’s opening.

Brent crude was stable at $72.63 a barrel.

At 9:30am the all share was 1.33% lower at 56‚634.50 points and the top-40 lost 1.49%. Banks dropped 1.85%‚ general retailers 1.68%‚ food and drug retailers 1.45%‚ industrials 1.42%‚ resources 1.33% and financials 1.31%.

BHP lost 1.54% to R290.99. Remgro dropped 2.41% to R210.43. FirstRand was down 2.24% to R67.23.

Liberty Holdings was 0.17% lower at R116.20. Diluted headline earnings per share (Heps) declined 1% to 547.5c in the six months to end-June from 553.3c in the matching period‚ Liberty reported on Thursday morning. Its dividend was kept unchanged.

Among retailers‚ Mr Price shed 1.79% to R228.82‚ Woolworths 1.66% to R51.42 and Shoprite 2.1% to R212.02.

Nepi Rockcastle lost 2.295 to R116.80.

By: Maarten Mittner – BusinessLIVE

Source: TMG Digital.

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