The JSE was taking a merciless pummeling in noon trade on Tuesday as weaker world markets and lower commodity prices exacted a heavy toll. Basket selling by futures players ahead of Thursday’s closeout exacerbated the downward pressure.
By 12.15pm, the all share index was down 4,42%. Resources retreated 5,21%, the gold mining index dived 10,01% and the platinum mining index plummeted 6,46%. Industrials lost 3,61%, while the financial and banks indices fell 4,26% and 4,36% respectively.
The rand was bid at 6,83 per dollar from 6,72 when the JSE closed on Monday, while gold was quoted at $589,60 a troy ounce from $610,25/oz at the JSE’s last close.
Gold broke below $600/oz in Asian trade for the first time since mid-April.
It was a total rout on the market, with only three of the 160 shares on the all share index managing to post gains.
A dealer said that one could not apply any logic to the JSE’s slide.
“If people believe we are going to have inflation leading to interest rates rising and the world economy slowing down feeding through to corporate profits, there is nothing you can do but let the correction run its course,” he commented.
He continued that there was a belief that commodities would come off quite sharply as a result of the global slowdown. Emerging markets would be hurt the most by this.
“That’s the theme that’s running through the market. It has to run its course and we’re not going to stop it. No matter how cheap things look and how tempting it is to go into the market, we’ve got to let the correction run,” he asserted.
“It’s an emotional drive. As much as people drove the market to ridiculous levels, so they are driving it down.”
The dealer said that in South Africa’s case, basket selling ahead of Thursday’s futures closeout was exacerbating the pressure on equities.
Gold stocks were prominent on the downside, with Gold Fields plunging 11,02% or R13,50 to R109 and AngloGold Ashanti sliding 10,42% or R28,97 to R248,15.
Harmony dropped 8,56% or R7,70 to R82,30.
Impala Platinum weakened 6,37% or R65,62 to R965 and AngloPlat was off 6,66% or R36,81 at R516,19.
London-listed diversified resources group Anglo American lost 3.,8% or R9,55 to R230,70 and BHP Billiton was 3,92% or R4,65 lower at R113,86.
Petrochemicals group Sasol slumped 5,5% or R13,01 to R223,50.
Coal and iron ore miner Kumba slid 5,57% or R5,90 rand to R100. Diversified industrials were taking strain, with Barloworld sagging 5% or R5,50 to R104,50.
Bidvest tumbled 6,73% or R6,50 to R90,10 and Imperial plunged 5,29% or R7,01 to R125,50.
Pulp and paper producer Sappi dived 8,73% to R6,79 to R71,01.
Food group Tiger Brands fell 6,16% or R8,95 to R136,25.
MTN Group gave up 5,53% or R2,96 to R50,54 and Telkom surrendered 3,21% or R4,11 to R124,10.
Media group Naspers slid 6,1% or R7,35 to R113,10.
Among retailer, Shoprite slumped 5,54% or R1,29 to R22 and Truworths tumbled 6,13% or R1,44 to R22,06.
Life assurer Sanlam plunged 8,83% or R1,28 to R13,22 and Liberty Group lost 6,57% or R4,70 to R66,80.
Standard Bank weakened 4,69% or R3,57 to R72,60 and FirstRand fell 4,24% or 73 cents to R16,50.
Nedbank slid 5,09% or R5,85 to R109,15 and Absa was off 3,56% or R3,75 at R101,50.
Microlender ABIL was 7,01% or R1,90 in the red at R25,20.
Leading the market’s upside, construction group Murray & Roberts climbed 22 cents to R22, 77. – I-Net Bridge