/ 20 March 2008

Heavyweight miners fall sharply

Heavyweight counters on the JSE’s resource and mining indices pulled back sharply on Thursday morning, as commodity prices started to lose ground, traders said.

The slump in commodity prices forced the JSE’s broader all-share index to pull back 3,23% by noon. The gold mining index fell 6,12%, the platinum mining index declined 5,84%, while resources gave up 5,62%. Banks dipped 0,96%, financials shed 0,85% and industrials were down 0,67%.

The rand was bid at 8,10 to the US dollar from eight when the JSE closed on Wednesday, while gold was quoted at $911,83 a troy ounce from $963,15/oz at the JSE’s last close. The yellow metal hit a fresh high on Monday of $1 032.40/oz.

The platinum price was quoted at $1 851/oz, down $51/oz from its close.

“The JSE is looking dreadful — we are seeing huge falls in miners as well as Anglo American and BHP Billiton because commodity prices have fallen quite a bit,” an equities trader said.

The trader explained that when the US Federal Reserve cut rates by 75 basis points earlier this week instead of the 100 basis points that the market was expecting, there was a lot of profit-taking in metals and the move was a “signal for people to take their money off the table in their euro-dollar positions”.

He said that commodity prices were coming down sharply because of the unwinding of speculative positions.

On the JSE, Anglo American tumbled R31,10, or 6,55%, to R444, BHP Billiton slumped R10,63, or 4,53%, to R223,87 and Sasol dropped R21, or 5,28%, to R377.

Gold miner AngloGold Ashanti pulled back R15,99, or 5,98%, to R251,51, Gold Fields retreated R7,51, or 6,05%, to R116,64 and Harmony declined R7,06, or 6,92%, to R95.

Platinum miner Anglo Platinum dipped R30, or 2,42%, to R1 210, Impala Platinum was down R23,75, or 7,66%, to R286,25 and Lonmin weakened R27,70, or 5,55%, to R471,50.

Diversified industrial group Bidvest edged up 98 cents to R110,98, brewer SABMiller improved 25 cents to R164,75, but Richemont was seven cents softer at R42,73.

FirstRand gave up 37 cents, or 2,34%, to R15,45, while Nedbank declined R1,35, or 1,15%, to R116,10. – I-Net Bridge