The JSE extended its losses by midday on Tuesday as a sell-off in banks on Wall Street’s credit concerns and higher oil prices added to negative sentiment.
Banks and financial stocks have pulled back throughout the morning session, after Citigroup in the United States lost 3,4% overnight, which triggered a sell-off on Wall Street and re-sparked global credit concerns.
By noon, the all-share index was 0,7% lower as banks retreated 1,52%. Financials fell 0,84% and industrials pulled back 0,23%. Resources lost 1,02% and the platinum-mining index shed 0,5%, but the gold-mining index was 0,56% higher.
The rand was bid at 6,89 to the US dollar from 6,75 when the JSE closed on Monday, while gold was quoted at $760,12 a troy ounce from $756,45oz at the JSE’s last close.
“Banks and financials are down because of the Citigroup news, and with oil at these levels, people are getting worried over inflation and that it could impair growth at such high levels, making the guys nervous,” said a local equities trader. Oil was last at $84,17 a barrel.
The trader added that banks could also still “be reeling under worries of the interest-rate hike”, and industrial stocks were mostly lower as less consumer spending [because of the hike] could create concerns in the sector.
“We are lower because there is more of a sell-off overseas and there was also the big rush into gold because gold pushed above the 760 level, but it has come back now quite a bit and we are starting to see profit-taking in London,” said the trader.
Looking at stocks on the JSE at midday, resource stock BHP Billiton had overtaken Anglo American as the biggest stock on the JSE by market capitalisation.
By noon, Anglo American lost R12, or 2,53%, to R463, which was in line with the market, and wasn’t really being affected by the “neutral” rating given by HSBC, even though some investors would be taking it into account. BHP Billiton shed R1,60 to R253,40 and Sasol edged up 65 cents to R334,20, which seemed to be having no effect from the battle over wages at Sasol Mining near Secunda, but rather climbing on higher oil prices.
Tensions in Turkey with possible military action by the Turks against the Iraq Kurds, and disruptions in Nigeria, have heightened supply concerns ahead of the northern hemisphere winter and resulted in a surge in oil prices.
Gold miner AngloGold Ashanti collected 98 cents to R304,72, while Goldfields lifted 53 cents to R128,32.
Platinum stock Anglo Platinum lost R16,70, or 1,48%, to R1 113,80 and Lonmin retreated R7,01, or 1,39%, to R497,01.
In the industrial sector, brewer SABMiller recovered R1,40 to R198,45.
Pick ‘n Pay slipped 52 cents, or 1,46%, to R34,99 and Shoprite lost 51 cents, or 1,31%, to R38,55, but Spar advanced R1,09, or 1,99%, to R55,99.
Pick ‘n Pay earlier reported a 15,1% increase in diluted headline earnings per share to 69,35 cents for the six months ended August from 60,32 cents a year ago. Headline earnings per share rose to 73,52 cents from a previous 63,86 cents. An interim dividend of 31,1 cents was declared for Pick ‘n Pay Stores and 15,18 cents for Pick ‘n Pay Holdings — both up 15,2% on the previous year. The group’s turnover was up 16,9% to R21,8-billion, while trading profit grew 26,8% to R568,4-million.
Media group Naspers was up R2,90, or 1,5%, to R195,70, but Johncom was off 50 cents to R103,50.
Among banks and financial stocks, Investec gave up R1,70, or 2,25% to R73,99 and Investec retreated R1,18, or 1,62%, to R71,81. Nedbank was R2,70, or 1,97%, lower at R134,30. — I-Net Bridge