Local markets falter as risk appetite wanes

 Local markets falter as risk appetite wanes

South African assets weakened prices on Tuesday, erasing gains from the previous session as appetite for riskier assets was muted by global concerns.

Worries over Italy’s budget, Brexit talks and Saudi Arabia’s handling of Jamal Khashoggi’s killing sapped investor confidence in emerging markets.

On Monday, South African assets were broadly firmer for the back of measures from Chinese authorities to improve the economy.

“Subsequently, renewed concerns in regards to the Italian budget and geopolitical factors have experienced the united states dollar recover across the board, plus the markets have sought traditional protection assets,” Nedbank analysts said in a note.

At 1456 GMT, the rand traded at 14.41 as opposed to the dollar, 0.51% weaker on the day, when compared to a close of 14.33 in New york city.

Government bonds were slightly weaker, together with the yield to the benchmark instrument due in 2026 up 0.5 basis points at 9.170%.

South Africa-focused investors will turn their care about finance minister Tito Mboweni’s inaugural budget speech on Wednesday, when he is anticipated to unveil spending shifts as a measure to haul the economy out of recession.

“Markets will be looking to Treasury to offer clarification on expenditure overruns, debt-stabilisation methods, stimulus support in a weak growth environment and state-owned entities reform,” Rand Merchant Bank analysts said in a very note.

In the equities market, the Johannesburg All-share index closed down 1.98% at 51,168 points, as the Top-40 index fell 2.23% to 45,007 points.

Market heavy-weight Naspers was liable for high of the decline for the top-40 index, becoming the 2nd biggest loser on the bourse.

It ended the session 4.59% weaker at R2 681, tracking declines of Chinese gaming and social networking firm Tencent Holdings <0700.HK., that it holds a 31% stake.

Food producers Tiger Brands and Pioneer Food fell 3.05% to R247.37 and 1.54% to 78.81 rand respectively after Morgan Stanley cut target prices on stocks.?

AscendEconomy

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