Global Stock Markets Fall On Renewed US-China Tensions, Virus Worries Persist and Drop In Tech Stocks

27/06/2020

On Friday the JSE and the local currency ended the week softer as mounting tension between the US and China weighed on risk sentiment. China ordered the US to close its consulate in Chengdu on Friday, in response to an order by the US on Wednesday for China to close its Houston consulate within 72 hours. The JSE/All-share fell 0.76% and the Top-40 index slipped 0.82% as risk appetite fades amid corona virus surge worries. The banking sector and general retailers lost 1.45 and 1.26% respectively at the close. The rand up 0.29% to 16.6095, while the Yield on 10 year govt rand bonds rose 9.4 bps to 9.215%. While Asian markets remains mixed this Monday morning, we looking at a positive opening with the IG futures indicating a 120 points good start to our market.

  • The IMF will consider South Africa’s request for a $4.2 billion loan to support its fight against the coronavirus pandemic.
  • S. AFRICA’S SANTAM TO PAY AS MUCH AS 1B RAND IN VIRUS RELIEF
  • SANTAM: LARGE CORPORATE CLIENTS EXCLUDED FROM RELIEF PAYMENTS
  • LIBERTY ESTABLISHES PANDEMIC RESERVE OF ABOUT 3B RAND
  • SOUTH AFRICAN MINES MINISTER MANTASHE DISCHARGED FROM HOSPITAL
  • ANGLOGOLD SEES 1H HEPS B/W 94C & 99C
  • AFRIMAT DECLARES FINAL GROSS DIV OF 81C
  • Full Taxis Are a South African Reality Even Virus Can’t Change
  • EARNINGS: Amplats (AMS SJ), Liberty Two Degrees Ltd (L2D SJ) 8am

EU/UK

London stocks finished in negative territory on Friday amid concerns about escalating tensions between the US and China. Retail sales continued to recover in June rising 13.90%, beating expectations of an 8% jump as some economic restrictions were lifted. The FTSE 100 ended the session down 1.41%, alongside the DAX dropping 2.02%, while the CAC-40 saw the session out 1.41% weaker at the close.  Both the FTSE 100 and the DAX indicate 10 points and 14 points positive start at the opening.

US

Wall Street stocks opened lower on Friday as global Covid-19 cases surpassed 15.5m – with 4.04m total cases and a death toll of 144,305 in the US alone – and a flare-up in US-Sino tensions weighed on sentiment. Shares in the likes of Amazon, Apple, Netflix, PayPal, eBay and Tesla were weighing on major indices in early trading amid concerns of another technology bubble. Intel shares recorded the largest declines, down more than 17%,  after posting disappointing guidance and being downgraded to ‘hold’ from ‘buy’ by analysts at Bank of America. U.S. stock index futures rose late Sunday, ahead of a busy earnings week. Dow futures were up about 130 points, or 0.5%, as were S&P 500 futures 0.38% and Nasdaq-100 futures 0.55% , with all three recovering from early-session lows.

ASIA
Asian stock markets were mixed Monday amid U.S.-China tensions and concern a recovery from the coronavirus pandemic might be weakening. Japan’s Nikkei fell 0.2%, as traders returned from a four-day holiday weekend. Hong Kong’s Hang Seng index retreated 0.65% with Tencent on the backfoot 1.49%, as the Shanghai Composite  gained 0.1 and Australia’s ASX 200 rose 0.16%. MSCI’s ex-Japan Asia-Pacific index rose 1.51% as Taiwan’s TSMC, Asia’s third-largest company by market capitalisation, rose 9.81%. The chipmaker’s gains boosted other tech stocks in the region and came after rival Intel (NASDAQ) signalled it may give up manufacturing its own components due to delays in new 7- nano-meter chip technology.

COMMODITIES

Gold hit an all-time high on Monday as tit-for-tat consulate closures in China and the United States rattled investors, boosting the allure of safe haven assets. The yellow metal rose 1.0% to a record high of $1,920.9 per ounce, surpassing a peak touched in September 2011; also helped by aggressive monetary easing adopted by many central banks around the world since the pandemic plunged the global economy into a recession. Some investors fret such an unprecedented level of money-printing could eventually lead to inflation.