/ 11 January 2008

JSE flat as investors remain nervous

The JSE had inched down into the red by midday on Friday as investors remained nervous amid global concerns of a possible United States recession.

Subprime worries carried over from last year have also continued to weigh on markets globally, spreading concern over the outcome for financial stocks.

By noon, the broader all-share index was sideways, down a slight 0,02% to 27 899,170 points. Industrials dipped 0,48%, but financials inched up 0,1%. Banks were 0,19% better, while resources recovered 0,32%. The platinum-mining index picked up 0,86% and the gold-mining index gained 2,48%.

The rand was bid at 6,83 to the US dollar from 6,85 when the JSE closed on Thursday, while gold was quoted at $894,60 a troy ounce from $884,55/oz at the JSE’s last close. Earlier, the yellow metal hit a new high of $898/oz, which boosted local gold-mining stocks.

“The JSE is very volatile at the moment. It is down slightly, and the market is very nervous,” said a Johannesburg-based equities trader.

He said that even though the Dow Jones last night [Thursday] ended higher, negative sentiment still prevailed. Overnight, the DJIA ended 0,92% higher.

“As soon as the JSE tries to rally a bit, it gets sold off again, and it is a very difficult to predict what is going to happen in the short term,” he said.

“At some of these levels in the market we are seeing a bit of value come through, but the sentiment overrules any values proposed. In this market, it seems, any good news doesn’t have any impact, but any negative news has a compound impact,” added the trader.

He said that there had also been a bit of a sell-off in Anglo and BHP Billiton during the morning session, explaining that he thought that the two heavyweights kept moving lower on worries about recession pressures in the US.

However, by midday, BHP Billiton had inched up 36 cents to R201,49, but Anglo American was R3,50 weaker, trading at R374,50.

“But what is benefiting at the moment is the gold and platinum price,” he said, adding that both had been running higher on the concerns of the financial situation globally as well as subprime issues. “Everyone is looking at how gold performs,” he said.

Taking a look at gold-mining stocks on the JSE at noon, AngloGold Ashanti advanced R6,76, or 2%, to R345, Goldfields collected R3,10, or 2,62%, to R121,30 and Harmony was R2,51, or 3,02% higher, at R85,51.

Platinum miner Anglo Platinum gained R24,98, or 2,28%, to R1 122,98, Lonmin was up R7,80, or 1,71%, to R463 and Impala Platinum was unchanged at R240.

Petrochemical group Sasol perked up R1,50 to R351,50.

Among building and construction shares, Basil Read was R1,10, or 3,81%, in the red at R27,80 and Murray and Roberts lost R2,71, or 2,92%, to R90.

Brewer SABMiller fell R3,74, or 2,01%, to R181,90.

In the telecommunications sector, Telkom lifted R1,41, or 1,07%, to R133,60 and MTN Group added R1,29, or 1,09%, to R119,40.

Banker Nedbank eased R1,20 to R121,80 and Standard Bank improved 29 cents to R96,20. — I-Net Bridge