The JSE was under pressure by midday on Thursday as investors were uncertain about the outcome for European markets ahead of the European Central Bank and Bank of England interest-rate decisions later in the day.
By noon, the broader all-share index had pulled back 0,49%. The gold-mining index gave up 1,12%, while resources were a slight 0,01% in the red, but the platinum-mining index inched up 0,16%. Industrials fell 1,02%, banks retreated 0,57% and financials were 0,51% lower.
The rand was bid at 6.84 to the United States dollar, from 6,86 when the JSE closed on Wednesday, while gold was quoted at $875,45 a troy ounce from $878,12/oz at the JSE’s last close.
“The JSE is being hit by a couple of issues. Investors are keeping a close eye over what happens on overseas markets and there is uncertainty existing in markets. Later today [Thursday] we have the interest-rate decision from the Bank of England as well as the European Central Bank,” said Lavan Gopaul, a trader from Cortex Securities.
He said that the thought process was that if the banks were to remain flat on rates, there would be continued dollar weakness and a spike in commodities.
“But should they lower the rates, then commodity stocks will come under pressure. If you take a look at the stocks being hit today, Anglo Platinum, Exxaro and Anglo American have all come under pressure. This is an indication that the market is uncertain about the forthcoming interest-rate decision in Europe,” he explained.
Gopaul also said that investors were a bit nervous about all international interest-rate decisions, explaining that interest rates affected currencies, and currencies affect commodity prices, which in turn affect equities.
“The JSE counts mainly on commodity stocks for movements in the Top 40,” he said.
By noon on the JSE, gold miner AngloGold Ashanti eased R3 to R334 and Goldfields was down R2,22, or 1,89%, to R115,03.
Melbourne-based BHP Billiton added R1,99 to R205, Anglo American perked up 54 cents to R387,50 but Sasol dipped R4,64, or 1,31%, to R350,26.
Platinum-mining group Anglo Platinum declined R9 to R1 095 and Impala Platinum gained R1,61 to R247,61.
Brewer SABMiller was off R4,13, or 2,15%, to R187,88 and distiller and vintner Distell dipped R3, or 4,76%, to R60.
Elsewhere, retailer Massmart advanced R1, or 1,43%, to R71. It earlier said that its total group sales increased by 11,6% to R20,1-billion for the 26 weeks ended December 23 2007 when compared with the previous year.
“Today, Massmart was the first of the retailers to come out with turnover numbers. It didn’t look good on a comparative basis even though the numbers came out positive,” said Gopaul. He did note, though, that the figure was a bit skewed as the trading year for the group was based on a 53-week trading year instead of 52, which resulted in the Christmas period being excluded from the 26-week update.
Among bank and financial stocks, Investec lost R1,69, or 2,74%, to R60 and FirstRand pulled back 37 cents, or 1,89%, to R19,20. — I-Net Bridge