/ 7 March 2008

Overseas markets, banks dampen JSE

International credit woes causing losses among overseas equity markets continued to dampen the JSE by midday on Friday.

The JSE’s broader all share index had shed 0,45% by noon, which was led by a 2,5% decline in the bank index. Financials were down 1,86% and industrials gave up 0,57%. Resources added 0,04%, the platinum mining index improved 1,09% and the gold mining index rallied 4,07%.

The rand was bid at 8,02 to the US dollar from 7,86 when the JSE closed on Thursday, while gold was quoted at $979,15 a troy ounce from $974,65 at the JSE’s last close. The platinum price was down $12 to $2 144,50/oz.

“One thing that is looking quite vulnerable right now is the Dow, which is weighing on Asia and other equity markets,” said a Johannesburg-based trader.

Overnight, Wall Street’s DJIA ended 1,75% lower, the Nasdaq lost 2,3% and the S&P500 fell 2,2%. In Asia, the Hang Seng fell 3,6% and the Nikkei decreased 3,27%, while the UK’s FTSE 100 was off 1,24%.

Dow Jones Newswires reported that US stocks tumbled on Thursday as the ailing credit market and a spike in home foreclosures intensified the market’s worries about a sagging economy.

The local trader added that on the JSE, the “only place to be now is in resources and metal-based stocks”.

“The JSE has come down because banks and industrials are weak, but the gold shares are up strongly on the back of a weaker rand. They have been in the doldrums for quite a long time,” he said.

He added that now that the rand is looking to weaken at least to 8,20 against the dollar, it is actually good news for the resource and gold shares.

“But it is also putting pressure on banks and industrials, which I think are still going to go more on the downside,” he said.

On the JSE, Standard Bank lost R2,22, or 2,33%, to R93,11 and Nedbank pulled back R3,72, or 3,27%, to R110,18.

Fixed-line operator Telkom was off R2,59, or 1,88%, to R135,01 and mobile operator MTN Group slipped 33 cents to R118,62.

Brewer SABMiller perked up R1,57 to R167,50 but diversified industrial group Bidvest dipped R1,94, or 1,64%, to R116,06 and Imperial weakened R3,67, or 4,88%, to R71,46.

Anglo American pulled back R3,55 to R543 and BHP Billiton retreated R5, or 1,89%, to R260, but Sasol collected R6,69, or 1,66%, to R408,79.

AngloGold Ashanti was up R6,25, or 2,11%, to R302, Gold Fields climbed R7, or 5,71%, to R129,50 and Harmony firmed R6, or 5,56%, to R114.

Anglo Platinum shed R2,50 to R1 262,50, but Impala Platinum increased R6,57, or 1,96%, to R341,57 and Lonmin was R6,22, or 1,14% higher, at R552,22. – I-Net Bridge