The JSE changed course to turn negative by midday on Tuesday as weaker world markets and a bit of local profit -taking set in.
By noon, the broader all-share index had given up 0,99%. Banks pulled back 2,39% and financials retreated 1,87%. Industrials lost 1,08% and the gold-mining index dipped 0,95%. The platinum-mining index gave up 0,90% and resources were 0,60% lower.
The rand was bid at 7,47 to the United States dollar from 7,42 when the JSE closed on Monday, while gold was quoted at $888,80 a troy ounce from $895,85/oz at the JSE’s last close.
“The JSE had a big run last week on the back of resources that went to crazy heights on the back of corporate action, and it is not surprising to see profit-taking and this amount of volatility today [Tuesday],” said a local trader.
He said that for the time being, the movement up on the JSE’s all share was just too much.
“The all share is consolidating after quite strong moves, and also, it’s not out of step if you compare our market with the East, so the JSE is down because of world markets as well,” he said.
Among offshore markets, the United Kingdom’s FTSE 100 was 0,61% lower, and in Asia, the Hang Seng dipped 0,89% and the Nikkei was off 0,82%.
The dealer explained that the volatility continues globally because of the uncertainty in overseas markets. The trader said that problems don’t just go away because interest rates have been dropped in the US. He added that there were still economic worries concerning the global economic situation and subprime issue.
“The gold price has also pulled back after its move over $900, so it is also not so surprising that that is down today [Tuesday],” he added.
The gold price had been up to as much as $907 an ounce on Tuesday.
On the JSE, resource group BHP Billiton declined R1,46 to R237,50, Anglo American was off R2 to R426 and Sasol shed 56 cents to R349,99.
Sasol, iGas and Compania Mozambicana de Gasuduto, as joint partners in the Republic of Mozambique Pipeline Investment Company (Rompco), earlier announced construction of a R1,1-billion gas-compression station to facilitate a 20% expansion of natural gas delivery from Mozambique to South Africa by the end of 2009. It will be based at Komatipoort in South Africa and will increase gas delivery capacity from a current 120-million gigajoules a year to about 147-million gigajoules a year.
According to Sasol, construction will commence by mid-2008.
Steel producer ArcelorMittal fell R9, or 5,42%, to R157. It said earlier that after having kept steel prices stable for nine months, flat carbon steel prices will increase by 12% to 15%, establishing a new base price level of €560 per ton for hot band.
For commercial grade plates a price increase of â,¬50 per ton would apply, it said, adding that further price increases might be necessary in the course of the second quarter and will be announced as soon as the final outcome of the ongoing annual raw-material price negotiations is known.
Elsewhere, gold miner AngloGold Ashanti dipped R3,50, or 1,16%, to R297,01 and Harmony was R1,11, or 1,52%, lower at R71,79.
Anglo Platinum was down R24,50, or 2,11%, to R1 135,50 and Impala Platinum eased 69 cents to R284,31.
Building and construction group Aveng slipped R1,78, or 3,21%, to R53,60 and Raubex Group tumbled R4, or 9,3%, to R39.
Diversified industrial group Barloworld lost R3,75, or 3,93%, to R91,75 and brewer SABMiller decreased 39 cents to R166,29.
Fixed-line operator Telkom gave up R1,29 to R138,21 but mobile operator MTN Group was unchanged at R126,50.
Banker Absa withdrew R3,49, or 3,28%, to R103 and Standard Bank fell R2,58, or 2,8%, to R89,43. — I-Net Bridge