The JSE Securities Exchange is expected to open weaker on Monday amid a surging rand and a weak close on United States markets on Friday.
At 8.40am the all share index futures (Alsis) were 148 points, or 1,39%, in the red after 67 contracts had traded, but the industrial index futures (Indis) were yet to trade.
The rand was quoted at 6,11 per US dollar from 6,20 when the JSE closed on Friday, while gold was quoted at $428,85 a troy ounce from $423,33/oz when the JSE last closed.
“The JSE is to open down on the stronger rand, the weak close on the Dow and a weak S&P future — currently down 4,2 points. But it’s early yet — the ALSI future is down, but only 67 contracts have traded and it might be a bit overdone. We will be watching the rand, which could just as easily move weaker on the day,” said a futures trader.
He added that the strong gold price might provide a bit of a cushion, but most of the South African gold shares were down on overseas markets. AFX reports that US blue chips ended at a new low for the year Friday and the Nasdaq lost 2% in a week where a fresh record high for crude-oil prices and a mixed batch of earnings reports shook investor confidence in the outlook for the US economy.
On the earnings front, Google’s shares soared on a strong third-quarter performance, while Microsoft and Amazon fell back as their results failed to impress investors.
The Dow Jones Industrial Average posted a triple-digit decline to end just off its low for the session, down 107,95 points, or 11%, at 9,757.81. The benchmark index hit an intraday low of 9,753.02, breaching its previous low for the year of 9,783.90 touched on August 13.
Within the Dow, Microsoft fell 3% on analysts’ concern about its second-quarter outlook. Caterpillar was the only Dow component to post a gain, climbing 0,4% on a broker upgrade.
The Nasdaq Composite Index fell 38,48 points, or 2% to 1,915.14, wiping out the prior session’s gains which saw the index close at a two-week high.
A broad sell-off in technology shares took the tech-rich benchmark lower.
The S&P 500 Index shed 10,75 points, or 1%, to 1,095.74. On the week, the Dow industrials fell 1,8%, the Nasdaq eked out a gain of 0,2% while the S&P 500 fell 1,1%.
In Tokyo on Monday share prices closed broadly lower, with the blue-chip Nikkei 225 index hitting a 10-week low on renewed concerns over the near-term trend of US stock markets, crude oil prices and the dollar, dealers said.
Sentiment was also depressed by the recent natural disasters in Japan, which triggered a selloff in insurers, they added.
On the Tokyo Stock Exchange, the Nikkei 225 Stock Average closed down 197,98 points or 1,8% at 10,659.15, off a low of 10,575.23, and the lowest level since August 16.