The JSE remained weak at midday on Monday, in line with overseas markets as the troubled US subprime housing market continues to unsettle investors worldwide.
At noon, the JSE’s all-share index was off 0,96%, resources fell 1.70%, the platinum mining index weakened 1,74%, but the gold mining index added 0,98% as the gold price stayed above $800/oz. Industrials shed 0,46%, financials lost 0,38% and banks were up 0,22%.
The rand was bid at 6,56 to the US dollar from 6,58 when the JSE closed on Friday, while gold was quoted at $803,80 a troy ounce from $796,05/oz at the JSE’s last close.
“The problem stems from suggestions that the US is not likely to cut rates again in December unless there are clear signals the [US economy] might slip into recession,” one trader said, explaining the root of the negative sentiment in the market.
Despite two rates cut in the US since September, investors remained nervous that the US economy might not be able to head off the troubled subprime housing market if Federal Reserve stops cutting interest rates.
“The Fed indicated that inflation was a concern, and on the other hand the latest data showed that the US economy seemed to be in a healthy state. It would be hard for the Fed to justify another rate cut,” the trader said.
However, leading gold miners bucked the overall weak trend on the local bourse, boosted by the stronger gold price. Gold Fields rallied 1,33%, or R1,50, to R114 and AngloGold Ashanti added R2,65 to R281,75.
Diversified miner Anglo American tumbled 2,64%, or R11,25, to R414,75 and BHP Billiton slumped 2,44%, or R5,80, to R231,60.
Among platinum miners, Anglo Platinum weakened 2,17%, or R23, to R1 037 rand and Impala Platinum shed 1,66%, or R3,86, to R228,99.
Petrochemicals group Sasol edged up 51 cents to R327,51.
Elsewhere, furniture retailer JD Group fell 1,05%, or 66 cents, to R62,15 after earlier reporting a 26% decline in diluted headline earning per share to 589,8 cents for the year until August.
Media group Johncom gained 1,86%, or R1,99, to R108,99. It was reported in the weekend newspapers that Koni Media Holdings, a company belonging to President Mbeki’s adviser Titus Mafolo, Foreign Affairs Department spokesperson Ronnie Mamoepa, former chief of state protocol Billy Modise and a businessman have launched a R7-billion bid for 100% of Johncom.
Short-term insurer Mutual and Federal climbed 4,64%, R1,28, to R28,88 after the Sunday Times, quoting unknown sources, reported that its parent company, Old Mutual, plans to sell its controlling stake.
Shares in the London-based Old Mutual fell 1,67%, or 40 cents, to R23,60. But Old Mutual’s losses were not isolated, as rival Sanlam was off 1,92%, or 45 cents, to R22,95.
On the industrial front, brewer SABMiller was down 60 cents to R192, while sugar producer Illovo dropped 3,35%, or 79 cents, to R22,81. – I-Net Bridge