SARAH BULLEN, Cape Town | Tuesday 5.00pm
THE local markets had no excuse to continue their recent lacklustre performances on Tuesday as they were hit with a barrage of domestic news.
And yet markets all but ignored the, looking instead to international markets which hit a skid after the influential Dow Jones industrial average on Monday took its third consecutive fall to lose 1,6%.
The JSE wasted no time in shedding investors, with the all share index down 1,35% by lunch. The all share closed the day off its lows, losing 1,08% on the day. Financial stock was hard-hit with a 1,72% tumble while the industrial index dipped 0,83%. The all gold index lost 1,07% as the gold price hovered around $254,65.
Three sets of key economic data were released on the day: July M3 money supply, which was worse than expected, and credit extension which showed a cutback in private sector credit which bodes well for a further interest rate cut. Also released was producer inflation for July that rose 6,2% in July. Dealers said the markets read mixed signals into the three sets of data, but failed to react to the data in the face of international concerns.
The Dow’s fall threw international markets in turmoil, with Tokyo’s Nikkei Dow ending the day with a 2,69% loss while Hong Kong’s Hang Seng index closed 1,50% lower.
All key European markets followed suit, with London’s FTSE-100 down 1,69% by late afternoon. Paris’s CAC and Frankfurt’s DAX were down 1,12% and 1,76% respectively.
The rand had a mixed day against other currencies, losing one cents against the dollar to R6,08 while it gained against the pound (R9,78) and euro (R6,41). The bond market took a fairly weighty knock to push the yield on the R150 to 14,70%.