/ 10 March 2008

US recession jitters dampen JSE

The JSE continued to be haunted by fears of a United States recession, which sent most heavyweight stocks on a selling spree by midday on Monday.

Adding to the negative sentiment was a pull back among local resource heavyweight counters, traders said.

By noon, the JSE’s broader all-share index had fallen 1,75%. The platinum-mining index dropped 4,21%, resources weakened 3,3% and the gold-mining index was down 0,46%. Banks gave up 1,52%, financials shed 0,74% but industrials inched up 0,12%.

The rand was bid at 8,01 to the US dollar from 7,95 when the JSE closed on Friday, while gold was quoted at $974,48 a troy ounce from $973,02 at the JSE’s last close.

“The JSE has pulled back because it is following weaker world markets,” said a Johannesburg-based trader.

Among overseas markets, the United Kingdom’s FTSE 100 was down 0,33%, while Asia’s Hang Seng recovered 0,91%, but the Nikkei declined 1,96%. On Friday, Wall Street’s DJIA ended down 1,22%, the Nasdaq eased 0,36% and the S&P500 shed 0,84%.

According to Dow Jones Newswires, markets fell on Friday as disappointing US employment data raised more fears about the health of the world’s largest economy.

Another trader explained that the JSE has also come off fairly strongly because of the sharp pull back in heavyweight counters such as Anglo American, Impala Platinum, BHP Billiton and Anglo Platinum — which make up quite a substantial portion of the market.

“These four stocks have been driving the market in the past few days, and they have all run up too fast and too hard, so we are seeing a bit of retracing,’ he said.

Anglo American was R24,95, or 4,65% lower, at R511,05 and BHP Billiton retreated R11,31, or 4,41%, to R245,11.

Anglo Platinum gave up R22,98, or 1,84%, to R1 226,02 and Impala Platinum weakened R20,15, or 6,11%, to R309,50.

Petrochemicals group Sasol perked up R4,86, or 1,19%, to R413,86 after it reported earlier that its diluted earnings per share for the six months to December 31 2007 had improved to R14,85 from a previous R12,60.

Gold miner AngloGold Ashanti decreased R5,01, or 1,7%, to R289,99 but Gold Fields added 86 cents to R128,49.

Construction and building group Aveng was down R1,05, or 1,96%, to R52,45. It said earlier that its diluted headline earnings per share for the six months to December 31 2007 had increased by 37% to 144,1 cents.

Brewer SABMiller lifted R3,02, or 1,81%, to R170,21 and luxury goods group Richemont was 61 cents, or 1,36%, firmer at R45,61.

Absa tumbled R4,30, or 4,13%, to R99,80 and Nedbank was off R1,90, or 1,73%, to R108. — I-Net Bridge