South African stocks opened softer on Thursday, as investors awaited a domestic interest rate decision later in the day and President George Bush’s speech on Iraq at the United Nations.
The all share index was 0,21% or 21 points lower at 9,920.5 points at 0753 GMT, with gold stocks preventing further losses.
”The market opened softer on a nervous Wall Street and European markets. Bush’s speech to the UN on plans for Iraq is dominating. Locally, we’re waiting for the interest rate announcement,” said one trader.
South Africa’s second-largest gold producer Gold Fields reversed recent losses, and jumped 5,2% or 690 cents to R138,50 as the price of the precious metal inched higher. It was the top traded stock by deals.
Bullion is expected to remain volatile on fears of conflict with Iraq. Spot gold was trading at $318,50/9,00 a troy ounce at 0733 GMT, from New York’s last quoted $316,60/7,10.
Global diversifed miner Anglo American gave up some of its recent gains, as investors locked in profits after a rally inspired by better-than-expected results on Tuesday and a flurry of upgrades.
Anglo was 0,15% or 21 cents lower at R137,80 at 0753 GMT.
Luxury-goods firm Richemont also capped further market gains, giving up 3,2% or 60 cents to R18,20 after saying first-half operating profit would be below last year’s levels with April-August sales down five percent.
”It was slightly negative. While organic sales were in line with my expectations the market was (expecting something) more positive,” Ronald Wildmann, head of sales and trading research at Bank Leu, told Reuters in Zurich.
In Switzerland, where the company has its primary listing, the stock was four percent lower. Local dealers said a firmer rand was keeping the pressure on Richemont in South Africa.
The rand held firmer levels reached overnight early on Thursday, but remained trapped in its latest range as the market awaited the outcome of the MPC.
At 0751 GMT, the rand was trading at 10,53 to the dollar, unchanged from its overnight level.
Dual-listed companies make their profits in foreign currency and pay most of their costs in rand, making them ideal hedges against the rand when the currency weakens. They tend to lose out when the currency is firm. – Reuters