/ 14 April 2008

World markets continue to burden JSE

World markets were dampened by negative earnings reports from the United States on Monday, causing the JSE to pull back sharply.

By midday, the JSE’s broader all-share index had fallen 1,48%. The banking index pulled back 2,51% and financials retreated 1,41%. Resources dropped 2,1%, the platinum-mining index lost 1,54% but the gold-mining index edged up 0,22%. Industrials were 0,84% in the red.

The rand was bid at 7,84 to the United States dollar from 7,81 when the JSE closed on Friday, while gold was quoted at $917,95 a troy ounce from $922,95/oz at the JSE’s last close.

One trader explained that news out of the US on Friday caused the DJIA as well as world markets to sell off sharply.

On Friday, US diversified industrials firm General Electric issued their results, which missed analyst’s expectations and caused the Dow to open lower. On Friday, the DJIA fell 2,04%, the Nasdaq dropped 2,61% and the S&P 500 was down 2,04%.

This led to a sharp pullback in Asian and European markets on Monday, said the trader. The United Kingdom’s FTSE 100 was down 0,55%, while Asia’s Hang Seng dropped 3,47% and the Nikkei weakened by 3,05%.

“The JSE is down almost 500 points on the back of the General Electric results from the US, which weren’t good — they missed their target by a lot, and that is why the Dow started to fall so much on Friday,” the trader said.

He added that subprime concerns were starting to filter through to markets again.

Dow Jones newswires reported that global stock markets were lower because of more worries about banks and the US economy’s fragile condition.

Looking at stocks on the JSE, resources group Anglo American lost R12,59, or 2,45%, to R502,01, BHP Billiton was off R6,40, or 2,36%, to R265,10 and Sasol gave up R7, or 1,66%, to R414,50.

Gold counter AngloGold Ashanti recovered R5,30, or 1,83%, to R294,20 but Gold Fields shed 49 cents to R113,51.

Platinum-mining share Anglo Platinum pulled back R23,98, or 1,8%, to R1 311,01 and Impala Platinum retreated R8,34, or 2,47%, to R329,66.

Brewer SABMiller gained R1,80, or 1,1%, to R166 and Richemont declined 56 cents, or 1,29%, to R42,99.

Media group Naspers shed R1,86, or 1,16%, to R158,14 and Avusa dropped R1,32, or 4,92%, to R25,52.

Absa withdrew R2,32, or 2,27%, to R99,68 and Standard Bank was down R2,39, or 2,6%, to R89,40.

Fixed-line operator Telkom weakened R2,11, or 1,62%, to R127,89 and cellphone operator MTN Group was R1,76, or 1,28%, lower at R135,26. — I-Net Bridge