WEAK precious metal prices dragged the South African resources-dominated bourse lower in opening trade on Thursday, while a slightly firmer local currency against the dollar also weighed, traders said.
The key all-share index fell 0,5% or 50,4 points to 10,979.3 points by 0750 GMT, led lower by natural resources shares like energy group Sasol and mining house Anglo American.
”The platinum and gold prices are down, and I think we will probably finish the day flat to slightly lower,” a dealer said.
The rand was trading at 10,51 to the dollar compared to 10,56 in overnight trade.
A firmer rand encourages investors to dump rand-hedge stocks, which normally lose favour when the currency strengthens as a large chunk of their sales are dollar denominated.
Sasol fell 2,7 percent to R110 on weaker oil prices, and Anglo American lost 1,2% at R166 on softer metals.
South Africa’s second largest gold miner Gold Fields gave up 1,7% to R126 on weaker bullion prices despite reporting record March quarter results.
Gold Fields said its headline earnings per share were 224 cents compared to 139 cents in December.
Analysts polled by Reuters expected Gold Fields to post an average 66% increase in headline earnings per share ? which strip out exceptional items and their tax effects ? of 231 cents, with a range of 220 to 243 cents.
The country’s number one gold miner AngloGold and Harmony Gold bucked the weaker bullion prices, recovering from recent falls.
AngloGold rose 2,9% to R595 after hitting a record high of R600 and Harmony gained 2,2% to R139,80.
Gold was hit by mild selling pressure in Asia on Thursday, chiefly book squaring ahead of a long holiday weekend and in preparation for further downward pressure on the US dollar, traders said.
Spot gold was last trading at $307.60/oz compared with $308.25 in New York.
Dealers said BHP Billiton, the world’s largest diversified miner, came under pressure after it reported a 33% slide in third-quarter profit on Wednesday, and said it saw no firm signs of recovery.
The stock fell 2,1% to R55,80 in Johannesburg. – Reuters