Daily Solutions – 10 August 2017

JOHANNESBURG – The JSE came off its recent string of record highs on Tuesday, closing lower, as voting on the removal of President Jacob Zuma continued in Parliament. Local focus was on domestic politics, with trade cautious ahead of the critical vote on a motion of no confidence that could result in the removal of Zuma and his Cabinet. Analysts expected a successful motion to be positive for local equities, despite some political uncertainty due to the reaction of the ANC and the need to appoint a new executive. The all share lost 0.33% to 55,980.1 points and the top-40 0.38%. Analysts expect that political uncertainty would follow his removal, warning that some in the market may be mistaken in their view of his removal as an unambiguous positive for the rand and equity markets. Local markets will re-open on Thursday after the Women’s Day holiday on Wednesday.

US MARKETS – U.S. equities closed lower on Wednesday as U.S.-North Korean relations heated up. The Dow Jones industrial average fell 36.64 points to close at 22,048.70, with Walt Disney contributing the most losses. The 30-stock index snapped a streak of nine straight record closes in the previous session. The S&P 500 closed just below the flatline at 2,474.02. The index fell as much as half a percent, with utilities leading decliners. The Nasdaq composite lagged, falling 0.28 percent to 6,352.33. President Donald Trump warned North Korea on Tuesday about facing “fire and fury” if North Korea delivers more threats against the U.S.

EUROPEAN MARKETS – European markets closed lower on Wednesday amid escalating geopolitical tensions between the U.S. and North Korea. The pan-European Stoxx 600 ended down 0.73 percent with almost all sectors and major bourses in negative territory. Europe’s banking index slipped around 1.4 percent on Wednesday as Germany’s two biggest lenders, Deutsche Bank and Commerzbank, led the losses. Both lenders were off by more than 3.5 percent. Chemicals also closed over 1 percent lower on Wednesday after weaker-thanexpected earnings. Germany’s Brenntag, the world’s largest chemical distributor, slumped towards the bottom of the benchmark after reporting slower performances across Europe, the Middle East and Asia. Its shares dipped over 6.5 percent.

ASIAN MARKETS – Most Asian indexes closed lower on Wednesday as geopolitical tensions re-entered the spotlight and China consumer inflation missed expectations. Japan’s Nikkei 225 fell 1.29 percent, or 257.3 points, to close at 19,738.71, and South Korea’s Kospi declined 1.1 percent, or 26.34 points, to finish the session at 2,368.39. Hong Kong’s Hang Seng Index was off 0.25 percent by 3:02 p.m. HK/SIN. Mainland markets closed mixed: the Shanghai Composite slipped 0.19 percent, or 6.2998 points, to end at 3,275.5730, while the Shenzhen Composite reversed earlier losses to climb 0.34 percent, or 6.3887 points, finishing the session at 1,885.5534. The Singapore market was closed for the National Day public holiday.


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