SARAH BULLEN, Cape Town | Monday 5.00pm
LOCAL markets lost ground on Monday as it followed United States and world markets lower following Wall Street’s heavy losses on Friday.
It was widely anticipated that the Johannesburg Stock Exchange would lose ground on the day after US markets tumbled 2,6% after after Federal Reserve chairman Alan Greenspan on Thursday advised banks on Thursday to set aside more cash as insurance against a possible financial market downturn.
The JSE’s fall was somewhat waylaid, however, as a technical glitch halted the market’s opening until around 11.00am. At close of trade the all share index had fallen 0,28% — less than the anticipated fall, dealers said. Pulling the index lower was the financial board which dropped 0,90% on the day and the industrial board with a 0,48% loss.
The financial board is shaky as the future of health care group Macmed hangs in the balance. The 16 financial institutions which are exposed to Macmed are: Standard Bank, ABSA, BOE, FirstRand, Nedbank, ABN AMRO, Imperial, TBB Holdings, FBC Fidelity, Mercantile, SocGen, Cape of Good Hope, IBSA, Investec, Fedbond and AMB.
Moving higher on the day was the all gold index which gained 0,25% on the day to 1284 despite a dip in the price of the metal to $312,90. International markets followed the US’s lead with Japan’s Nikkei Dow losing 1,85%. Hong Kong markets were closed due to a public holiday but are expected to take a battering when they open on Tuesday morning.
European markets were all trading down in the afternoon session Wall Street opened fairly directionless on Monday morning and is expected to remain on shaky ground until the release of consumer inflation on Tuesday. The data is a pivotal indicator on the future movement of US interest rates and is expected to indicate inflationary pressures.
The rand remained weak on Monday, trading at R6,15 to the dollar and R10,27 to the pound at 4.30pm. Bonds continued to lose ground