The JSE Securities Exchange South Africa was once again under pressure at the start on Tuesday, taking its cue from weak global markets. Gold stocks were particularly hard hit, after their ADRs took a hammering in New York overnight.
By 0912, the all share index was down 0,50%. Financials and resources were 0,51% and 0,69% weaker respectively. The gold mining index was 2,8% in the red, while the IT index lost 0,9%. The all share industrial index was flat (-0,19%), but looking to lose more ground, while the platinum mining index was also flattish (+0,18%).
The rand was trading at 7,9076 to the dollar from 7,8676 when the JSE closed on Monday, while gold was quoted at $353,40 an ounce from $354,55 at the JSE’s last close.
A dealer said that, as has been the trend in past weeks, volumes were very low, with uncertainty over Iraq prompting many people to take to the sidelines.
“Gold shares are taking a hiding after coming off sharply in New York last night. Across the board, we once again have a negative trend. World markets are having a dampening effect,” he said. He added that the slightly weaker rand was probably stemming some of the JSE’s potential losses.
Gold stocks led the downside of the market, with AngloGold (ANG) plunging 4,96% or R12 to R230. Gold Fields (GFI) was down 3,10% or R2,70 to R84,50 and Harmony (HAR) lost 3,97% or R4,09 to R99,01.
Synthetic fuels group Sasol (SOL) was down 1,08% or 91 cents at R83 after going ex-dividend (R2,15).
Sasol was also under pressure on Monday after reporting a below consensus 3% increase in headline earnings per share (HEPS) for the six months ended December 31 to 752 cents from 731 cents a year ago.
Insurers were again taking flak with Old Mutual (OML) slumping 1,59% or 15 cents to R9,30. Liberty (LGL) plunged 5,58% or R2,85 to R48,20 — a long-term low.
However, only 100 shares had traded in one deal. On the industrial market on Tuesday, London-listed IT group Dimension Data (DDT) continued to lose ground, falling 2,14% or four cents to R1,83. The share is down almost 30% this month.
On Friday, the JSE announced that Telkom (TKG) would replace Didata in the Top 40, Indi 25 and Fin and Ind 30 indices, resulting in a sell-off in the share, which was already under pressure after a trading update.
Telkom shares gained nine cents, to R28,19 in early trade on Tuesday. The Wall Street Journal reports that US treasury prices jumped on Monday as war-wary investors fled stocks, sending the yield on the 10-year Treasury note down to the lowest level in 44 years.
The surge in bond prices, which move opposite to the yields, along with the continuing tumble in major stock indexes, reflected the fact that investors are nervous about potential conflicts with Iraq and North Korea and the inability of stocks to muster any kind of rally in recent weeks. The Dow Jones Industrial Average yesterday fell 171,85 points, or 2,22%, to 7 568,18, a five-month low.
All 30 stocks in the index fell, the third time that “oh-for-30” event has happened so far this year, matching last year’s total. The Nasdaq Composite Index dropped 2,06%, or 26,92, to 1 278,37. The Standard & Poor’s 500-stock index fell 2,58%, or 21,41 points to 807,48. – I-Net-Bridge