The FTSE/JSE All Share Index saw a slight decline on Tuesday, hovering around 84 200, extending its losses for the third consecutive day. Global market sentiment was weighed down by growing scepticism over China's economic stimulus measures and rising caution surrounding President-elect Donald Trump's policies, which could compel the Federal Reserve to reassess the timing of future interest rate hikes. Domestically, investors are focusing on South Africa's Q3 unemployment data and manufacturing figures for insights into the country’s economic health. On the corporate front, resource-linked sectors were the hardest hit, as falling prices of precious metals and iron ore exerted downward pressure on mining stocks.
Across the Atlantic, Wall Street cooled off for the first time since the presidential election, with the major indices wavering around the flatline on Tuesday after Monday's record highs. Traders paused from the post-election rally, awaiting further clarity on Donald Trump’s key political appointments. While consumer staples and communication services saw modest gains, sectors such as consumer discretionary and utilities were among the worst performers. Tesla (NASDAQ:TSLA) shares fell 2.70%, ending a five-day winning streak, while Home Depot (NYSE:HD) saw a slight 0.40% increase after posting earnings and revenue that beat expectations.
In the United Kingdom (TADAWUL:4280), the FTSE 100 followed a similar trajectory, falling by more than 0.75% to dip below the 8 060 mark. This decline mirrored the broader pullback across European equities and erased the previous day's gains. Traders are increasingly concerned about the potential impact of Trump’s stance on Europe and China, particularly regarding the possibility of punitive tariffs. Meanwhile, UK economic data showed stronger-than-expected wage growth in September, but the unemployment rate unexpectedly rose, complicating the Bank of England’s future decisions. AstraZeneca (LON:AZN), the largest company on the FTSE 100, saw a 1% decline despite raising its revenue forecast, with investors remaining wary of an ongoing investigation in China.
In the Eurozone, markets experienced a broadly negative session, with the STOXX 50 falling 0.80% and the STOXX 600 losing 0.60%. This followed gains of about 1% the day before and reflects the cautious mood permeating the region. Traders are closely monitoring the potential implications of a second term for Donald Trump on the global economy, particularly as details of his political team continue to emerge. Economic sentiment in Germany also took a hit, with the ZEW Indicator unexpectedly falling, weighed down by the uncertainty surrounding Trump’s victory and political instability within the German government coalition. Earnings season continued, with Bayer (ETR:BAYGN) shares tumbling by about 11% after the company slashed its earnings outlook.
In Asia, Japan’s Nikkei 225 Index dropped 0.40%, closing at 39 376, reversing earlier gains as semiconductor stocks and related sectors came under pressure, mirroring declines in US markets. The downturn occurred despite comments from Japan’s Industry Minister Yoji Muto, who confirmed that the government would not raise taxes to fund a 10 trillion-yen stimulus plan for AI chipmakers.
Meanwhile, in China, the Shanghai Composite fell by 1.39%, closing at 3 422, while the Shenzhen Component lost 0.65%, settling at 11 314. This reversed earlier gains, driven by weak economic data and a disappointing stimulus package. Data released after the market closed on Monday revealed that Chinese banks extended only 500 billion yuan in new loans for October, far below September's figure and the 700 billion yuan forecast.
In commodities, WTI crude oil prices saw a 1% increase, recovering to $69 per barrel after a sharp 6% drop over the previous two days, as investors viewed the dip as a buying opportunity. On the other hand, gold continued its downward trend, falling to around $2 600 per ounce for the third consecutive session, its lowest level since 20 September, pressured by a stronger US dollar and reduced demand for safe-haven assets.
