Daily Solutions 11 August 2017

JOHANNESBURG – The JSE all share closed weaker on Thursday, slipping below the 56,000-point level, as the market followed retreating global markets amid heightened geopolitical tension between the US and Noth Korea. It was the first day of equity trade since President Jacob Zuma survived a motion of no confidence vote late on Tuesday, with analysts warning in the morning that trade is expected to remain volatile over the short term. General retailers, banks and industrials were hard hit in risk-off trade, with gold shares rocketing on the day. Platinum and resources followed choppy trade in oil, with Brent crude losing earlier gains in late trade. The JSE all share closed weaker on Thursday, slipping below the 56,000-point level, as the market followed retreating global markets amid heightened geopolitical tension between the US and Noth Korea.It was the first day of equity trade since President Jacob Zuma survived a motion of no confidence vote late on Tuesday, with analysts warning in the morning that trade is expected to remain volatile over the short term.

US MARKETS – U.S. equities fell the most since May on Thursday as tensions between the United States and North Korea persisted. The Dow Jones industrial average fell 204.69 points to close at 21,844.01, with Goldman Sachs contributing the most losses. That was its biggest point loss since May 17. The S&P 500 declined 1.45 percent to end at 2,438.21, with information technology and financials leading the way lower. It was the benchmark’s worst percentage drop since a 1.8 percent decline on that same day in May. The index also dipped below its 50-day moving average, a key technical level, for the first time in a month. The Nasdaq composite lagged, pulling back 2.13 percent to 6,216.87, with Apple, Alphabet, Amazon, and Netflix all trading lower. “If you look across all sectors, it’s a broad-based sell-off,” said Paul Springmeyer, investment managing director at U.S. Bank’s Private Client Reserve. “The news is concerning to all. … I think this is a cautious pullback.”

EUROPEAN MARKETS – The pan-European Stoxx 600 ended off by 1 percent with all sectors and major bourses moving south. Britain’s FTSE 100 slipped more than 1.4 percent on Thursday amid weaker than-expected economic data. The U.K.’s benchmark index registered its worst trading day in four months.Basic resources stocks were the worst performers on Thursday, down by over 1.5 percent, despite some buoyant earnings reports. Glencore increased its full-year year profit forecast for 2017. However, its shares dipped more than 2.4 percent. The world’s biggest miner, BHP, said it would invest significantly in its nickel business as demand for electric vehicles picked up, Reuters reported. Its shares closed slightly lower. Coca-Cola Hellenic surged to the top of the European benchmark, up by over 9 percent after announcing that it remained on track to reach broad-based revenue and margin growth forecasts for the full year.

ASIAN MARKETS – Markets in Asia remained jittery in Thursday trade, although the escalation in tensions surrounding North Korea appeared to wane slightly. South Korea’s Kospi fell 0.38 percent, or 8.92 points, to end at 2359.47, extending the last session’s more than 1 percent loss, but off earlier lows. Japan’s Nikkei 225 ended down 0.05 percent, or 8.97 points, at 19,729.74. Investors in Japan also digested the announcement of a third consecutive fall in core machinery orders for June. Core orders fell 1.9 percent, compared with a 3.7 percent rise forecast, according to Reuters. While machinery orders are regarded to be a volatile metric, they could influence market sentiment. Hong Kong’s Hang Seng Index dropped 1.13 percent, or 313.09 points, to end at 27,444.00 while mainland markets gave up early gains.

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Source: Investment Solutions