The JSE pulled back from earlier gains by midday on Tuesday, as heavyweights Anglo American and BHP Billiton started to weaken.
By noon, the JSE all-share index was only 0,15% in the black, after being up over 0,7% earlier in the session. The gold mining index rallied 3,42%, while the platinum mining index inched up 0,04%, but resources lost 0,17%. Financials and banks recovered 0,62% and 0,58% respectively, and industrials were 0,39% higher.
The rand was bid at 6,67 to the US dollar from 6,65 when the JSE closed on Monday, while gold was quoted at $808 a troy ounce from $810,05/oz at the JSE’s last close.
“Overnight, there was a lot of focus on China,” said a local trader.
He said that many people are saying that the Chinese yuan is undervalued, as it is pegged on the US dollar.
“Figures came through yesterday that China’s inflation is at an 11-year high. The rest of the world is hammering for it to increase the value of the yuan, which is pegged on the US dollar. Obviously, exports are made easier, but if the yuan appreciates against the dollar, it makes it more difficult to export and it requires more input and demand for base metals. This is why copper and nickel came down, and that is the main reason why Anglo and BHP Billiton are lower,” explained the trader.
He said that speculation of a possible bid by Anglo for Xstrata has been driving Anglo recently.
“On the financial front, there was talk of a $10,5-billion injection for Citigroup, and financial stocks internationally have gone higher on that news,” he said.
On the JSE’s resources sector, BHP Billiton pulled back R1,68 to R227,99, while Anglo American was off R7,50, or 1,6%, to R462,50. Petrochemical group Sasol improved R3,50, or 1,01%, to R348,51.
Among gold miners, AngloGold Ashanti rallied R14,86, or 5,02%, to R310,87 and Harmony advanced R2,52, or 3,53%, to R73,97 on the improved gold price.
Platinum group Anglo Platinum shed R6 to R1 004, but Impala Platinum added R1,01 to R248,01.
Brewer SABMiller recovered R1,35 to R185,85 and sugar producer Illovo gave up R1, or 4,17%, to R23. Swiss-based luxury goods group Richemont eased 25 cents to R45,40.
Firstrand perked up 20 cents to R20,95 and Standard Bank lifted 65 cents to R110,64. – I-Net Bridge