After starting very close to a record high, the JSE was lower at midday on Friday due to the increase in Chinese interest rates, which has sparked fears about the effect that this could have on demand for commodities, equity traders said.
By 12.10pm, the all-share index was 1,34% weaker at 21 068,010 after touching a lifetime high of 21 353,50 on Wednesday. Resources declined 0,49%, the platinum-mining index dropped 2,99% and the gold-mining index fell 1,13%. Industrials and financials declined 0,49% and 0,33% respectively, while the banks index was 0,43% better.
The rand was bid at R6,1076 per dollar from R6,17 when the JSE closed on Wednesday, while gold was quoted at $639,73 a troy ounce from $638,80/oz at the JSE’s last close.
“The mining sector is weighing on the market as a result of the Chinese increasing interest rates and the possible impact on the demand for commodities,” a Johannesburg broker said.
AFX reported on Thursday that the Chinese central bank raised its key interest rates in an effort to slow explosive loan growth and cool investment in the world’s most populous country.
It was the People’s Bank of China’s first rate hike since October 2004 and comes against a background of a rapidly expanding economy that has been fuelled by low interest rates and easy investment terms. Those conditions have raised concerns that an investment bubble could be inflating.
Global resources group BHP Billiton was off 3,5%, or 449 cents, to R124,80, while Anglo American shed 3,9%, or 10,40 cents, to R255,65.
Mittal Steel South Africa was off 2,8%, or 198 cents, to R69,02, while Kumba Resources shed 155 cents, or 1,32%, to R116.
In the platinum sector, Impala Platinum was off R36,01 to R1 143,99 and Anglo Platinum shed R20 to R590.
World number-three platinum miner Lonmin on Friday climbed to an all-time high of R308,60. The stock was last quoted at R304,70, up R2,88 or 1% higher than the Wednesday close.
Among gold counters, AngloGold Ashanti shed 60 cents or 0,2% to R327,40, Gold Fields declined R3,11 or 2% to R150,50 and Harmony Gold was 70 cents lower at R98,40.
Petrochemicals group Sasol dipped 579 cents, or 2,3%, to R250,21.
Brewer SABMiller climbed 60 cents to R129, while Imperial was 150 cents firmer at R167,50.
On the financial front, Old Mutual plc shed 47 cents or 2,2% to R21,40.
Nedbank declined 53 cents to R125,52, Standard Bank strengthened 40 cents to R86,40 and FirstRand firmed four cents to R19,80. — I-Net Bridge