SARAH BULLEN and Reuters, Cape Town | Thursday 5.00pm
THE local stock market had a slack day on Thursday ahead of Congressional testimony from Federal Reserve Chairman Alan Greenspan, despite a strong showing from the currency and debt markets.
Dealers said the day was dominated by sector playing as investors rushed to dump financial and information technology stock in favour of technology shares. The financial index lost 0,70% on the day while investors moved into blue chip industrial index 0,18%.
Demand for gilt stock pushed the heavyweight Alsi40 index up 0,37% — outperforming the market as a whole which rose 0,27%. Gold stock had a good run on news of an increased bullion price which rose to $255 an ounce amid fresh uncertainty on International Monetary Fund gold sales. In afternoon trade the gold price dipped again to $253,85 by 4.30pm — leaving the all gold index off its highs at a 1,79% gain.
European traders said bullion was likely to test resistance at $256 on signs that the US Congress may block the IMF’s planned sale of 10-million ounces of gold to fund debt relief for impoverished countries. US House banking committee chairman James Leach said on Wednesday that he opposes the sale.
Local dealers said the market was nervous, waiting on Congressional testimony from Federal Reserve Chairman Alan Greenspan which is expected to hint at the movement of US interest rates.
European bourses had red across the board in the late afternoon session as Frankfurt’s DAX took a heavy 1,51% knock — dragging London and Paris lower. Asian markets earlier in the day closed sharply lower, with Tokyo’s Nikkei Dow shedding 2,89% while Hong Kong’s Hang Seng index dipped a smaller 0,34%. On the local front the rand held firm against the dollar to trade around the R6,10 for most of the day while the rand was quoted at R9,67 to the pound at 4.30pm.