South Africa's FTSE/JSE All Share Index declined on Monday following comments by U.S. President-elect Donald Trump over the weekend, which unsettled traders in the BRICS bloc and raised concerns about his second term's impact on trade relations. Trump’s remarks on Saturday demanded that BRICS countries commit to not creating or backing a new currency to replace the dollar, or face 100% tariffs. At 5:41pm, the rand had weakened by 0.71% to R18.20/$, although it had firmed by 0.39% to R19.05/€ and 0.14% to R22.96/£.
In the US, the S&P 500 gained 0.20% and the Nasdaq surged 0.90% on the first trading day of December, driven by gains in the tech, consumer discretionary, and communication services sectors. The Dow Jones, however, lost approximately 100 points, with the energy and real estate sectors posting the biggest losses. Traders are now awaiting key economic data this week, including PMIs, JOLTs, and the jobs report, to assess the US economy and the Federal Reserve's policy direction. The political landscape also remains a focal point, with Trump’s demands for BRICS countries to pledge against creating or supporting a new currency, warning of potential 100% tariffs.
In Europe, the Eurozone’s STOXX 50 dropped 0.60%, and the STOXX 600 lost 0.10% as concerns over the political situation in France heightened. France’s far-right party has threatened to bring down the government over a deadlock regarding the national budget. French stocks were among the hardest hit, with the banking sector experiencing significant losses. Vinci (EPA:SGEF) (-2.10%), AXA (-1.90%), Societe Generale (EPA:SOGN) (-1.80%), BNP Paribas (EPA:BNPP) (-1.70%), Saint-Gobain (EPA:SGOB) (-1.40%), and Engie (EPA:ENGIE) (-1.30%) saw the biggest declines. Additionally, Stellantis fell more than 7% following the unexpected resignation of its CEO.
The UK’s FTSE 100 remained largely flat, edging lower to around 8 286 as traders reacted to fresh manufacturing PMI data and political instability in France. On the domestic front, Nationwide data revealed a 3.70% year-on-year increase in UK house prices for November, accelerating from 2.40% in October, marking the fastest growth rate since November 2022. Final manufacturing PMI data is also due today. In the corporate sector, housebuilders faced notable declines, with Persimmon PLC (LON:PSN), Vistry Group PLC (LON:VTYV), and Taylor Wimpey PLC (LON:TW) falling 3.10%, 2.80%, and 1.30%, respectively, following downgrades to ‘underperform’ by RBC Capital Markets.
In Asia, Japan’s Nikkei 225 Index rose 0.80% to close at 38 513, while the broader Topix Index climbed 1.27% to 2 715, recovering from earlier losses thanks to strong gains in technology and banking stocks. Data revealed that Japanese firms increased capital expenditure in the third quarter, indicating strong corporate confidence and reinforcing expectations that the Bank of Japan may soon raise interest rates.
Meanwhile, China’s Shanghai Composite gained 1.13%, closing at 3 364, and the Shenzhen Component surged 1.36% to 10 756, extending last week's gains. Investors reacted positively to strong manufacturing data from China, with official figures showing that manufacturing activity expanded for the second consecutive month in November, driven by a series of stimulus measures from Beijing.
In commodities, WTI crude oil futures stabilised at $68.50 per barrel as investors monitored positive economic data from China and awaited the upcoming OPEC+ meeting. Gold fell below $2 640 per ounce, ending a four-session streak of gains, as the US dollar strengthened and investors remained focused on the geopolitical situation in the Middle East.
