SARAH BULLEN, Johannesburg | Tuesday 6.30pm.
IT was an “utterly miserable” day on the Johannesburg Stock Exchange as it shook off the sleepy mode of late and headed into a free-fall that saw just under 5% shaved off the market value.
Dealers were largely bracing for a downturn on Tuesday morning after Wall Street’s two month bull run came to an abrupt halt on Monday night, as the market lost 241 points. On the JSE, financial and hi-tech stock were hard-hit, with the financial index diving 5,18%, dragging the all share index 4,15% down. The all gold index buckled under the negative sentiment and a downturn in the gold price to lose a meaty 6,30%.
New York’s Dow Jones Industrial Average opened lower again on Tuesday, extending Monday’s 241 point fall after months of a rebound. Monday’s downturn, which left all major indices up to 2% lower, was the first real wave of profit-taking since the stock market rebound began almost two months ago. Hardest hit were the computer and Internet-related stock.
Asian markets followed the Dow, notching up significant overnight losses with Hong Kong’s Hang Seng index closing 4,1% lower. Japan’s Nikkei recovered some of its earlier losses to lose just 0,32%. European and Latin American bourses also took their cue from the US, falling in early trade.
The widespread fall hit recently demutualised life assurer Sanlam with an unpleasant shock, tumbling its one-day-old stock by 32c to R5,57. Dealers said the rapid down-turn was a bit of a shock to the market, which has been largely winding up ahead of the Christmas holidays. The widespread pessimism over South Africa’s future coupled with no indication of an interest rate cut, largely held back any chance of local stock bucking the international trend.
Bonds lost some ground on the day, with the R150 climbing to a 16,10% yield. The rand continued to drift, gaining some ground against the dollar to R5,66 and the pound to R9,25.
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