Fri, 18 Oct 2019

Global equity markets took a breather on Wednesday after a seven-day winning streak. On Tuesday US President Trump made it clear to the market that he held the cards to any future US-Sino trade deals and that he was stalling the talks as he intends to get "the best deal ever". Equity markets have become very fickle and have jumped at any news that comes from President Trumps Twitter account. What is certain in these markets is volatility is the only constant and uncertainty reigns.

Asian markets closed the day weaker today after protest action in Hong Kong against the second reading of the expropriation bill. The bill intends to lift the vail that protects Hong Kong citizens from repressive Chinese legislation a caveat that has been in place since the handover of Hong Kong back to mainland China in 1997.

The Hang Seng retreated 1.73% whilst the Shanghai composite eased 0.76%, loses were also recorded by the Nikkei and ASX 200 indices which shed 0.35% and 0.04% respectively. Chinese Inflation numbers released this morning indicated an uptick in inflation to 2.7% with food inflation increasing by 1.6%, this inflation number has been the highest since November of 2018. The increase in inflation provides the PBOC with more ammunition to inject more stimulus in the market.

The miners regained their shine on Wednesday as the Rand eased, and commodity prices picked up. AngloGold Ashanti Ltd [JSE:ANG] advanced 6.77% . Gains were recorded by Sibanye Gold Ltd [JSE:SGL], Gold Fields [JSE:GFI] and Harmony Gold Mining Ltd [JSE:HAR] adding 5.27%, 4.67% and 3.92% respectively.

On the flip side of the market losses were recorded by some of the big blue-chip firms. Sasol Ltd [JSE:SOL], British American Tobacco Plc [JSE:BTI] retreated 3.04% and 3.12% respectively. Out of favour chemicals producer Omnia Holdings [JSE:OMN] retreated 5.22% to trade at 4100c.

The JSE All-Share index closed 0.1% weaker whilst the JSE Top-40 index gained 0.07%. The Resource index was firmer on the day gaining 1.13%, the Industrials retreated 0.54% whilst the Financials shed 0.55%.

At 17.00 CAT, Palladium was 0.22% firmer shaking off the losses sustained on Tuesday to trade at $1392/Oz, Platinum was also firmer recording gains of 0.45% to trade at $814.90/Oz, whilst Gold was 0.4% firmer at $1336.80/Oz.

Brent crude was weaker again on Wednesday recording losses of 2.02% to trade at $61.05 per barrel at 17:00 CAT.

The local unit was weaker against the majors on the day and was trading at R14.67 against the USD, R16.61 to the Euro and R18.66 to the Pound Sterling.

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