After opening flat on Tuesday morning, the JSE followed world markets into the red during the course of the morning.
At noon, the all-share index was down 1,25%, with resources off 1,34%, the gold-mining index off 2,51% and the platinum-mining index 2,26% weaker. Industrials were down 0,97%, financials shed 1,64% and banks were off 1,68%.
The rand was bid at 7,87 to the dollar from 7,81 when the JSE closed on Monday, while gold was quoted at $929,25 a troy ounce from $922,57/oz at the JSE’s last close.
A local equities trader said that after a mixed start the JSE followed the trend on global markets, moving into the red.
He explained that house price data in the United Kingdom — quickly followed by a sharp drop in the UK PMI — weighed on UK stocks, with the FTSE 100 down almost 2,5% by midday South African time.
UK house prices fell to their lowest levels since 1991 and the UK manufacturing PMI index dropped to 45,8 in June from 49,5 in May, its lowest reading since December 2001.
Dow Jones Newswires reports the dollar is sinking in Europe on Tuesday as equity markets fall, risk aversion rises, crude prices hit new record highs and the market prepares for more poor US economic news.
Although the US equity market ended in positive territory on Monday with the Dow Jones Industrial Average up 0,03%, sentiment turned sour again by the time Asian markets closed, with the Nikkei losing 0,1% and the Shanghai Composite 2%. European bourses were also lower as global risk appetite receded even further.
The gloomy mood in financial markets wasn’t only being driven by continued concern about financial stocks but by the relentless rise in crude prices, with futures contracts on the New York Mercantile Exchange rising a further $1,50 to $141,50 a barrel since the close in New York on Monday.
The local trader said all eyes will be on the Wall Street opening later.
On the JSE, Anglo American was down R6,50, or 1,19%, at R541,50 and BHP Billiton shed R2,97, or 1%, to R293,50. Sasol, which earlier rose to R471, was last down R4,01 at R456,99.
Among gold miners AngloGold Ashanti shed R10,85, or 4,04%, to R258 while Gold Fields was off R1,39, or 1,4%, to R98,11.
Platinum miner AngloPlat was off R2,56 to R1 304,44 and Implats declined R10,49, or 3,39%, to R298,51.
Luxury goods group Richemont was off four cents to R42,90 and Barloworld was off R2,19, or 2,74%, to R77,81. Imperial was off R1,60, or 3,03%, at R51,15.
Among banks, Standard Bank fell R1,70, or 2,23%, to R74,60, while Nedbank was down 85 cents to R91,10.
Absa shed R1,24, or 1,51%, to R80,77 and FirstRand gave up 21 cents, or 1,58%, to R13,09. — I-Net Bridge