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JSE pares losses but still cautious

The JSE was off its lows at midday on Tuesday, thanks to firmer resources. However, players remained cautious as overseas markets are weaker after a steep overnight decline on Wall Street amid renewed fears about the credit markets.

By 11.56am, the all-share index was 0,58% lower. Resources were up 0,48%, but the gold and platinum mining indices were down 1,55% and 0,23% respectively. Banks were down 1,33%, financials fell 1,48% and industrials weakened 1,60%.

The rand was bid at 7,47 to the US dollar from 7,50 when the JSE closed on Monday, while gold was quoted at $929,40 a troy ounce from $927,85 at the JSE’s last close.

“We are off our weakest levels as some stocks were just overdone at the opening. Our financials are not really in the same basket as those overseas, but when you see the world financial stocks lower, we tend to follow,” said a local equities trader.

The trader added that Anglo and Billiton are both up, so that has helped the local market. However, the strong rand was taking the strength off resources stocks, capping their gains.

Dow Jones Newswires reports that US stock futures crept higher on Tuesday ahead of the latest readings on house prices and consumer confidence, with Merrill Lynch & Co in the spotlight after the once-mighty brokerage said it’s selling over $30-billion of mortgage assets and $8,50-billion in stock.

S&P 500 futures rose 3,1 points to 1 238,20 and Nasdaq 100 futures rose 2,25 points to 1 816,00. Dow industrial futures rose 14 points.

US stocks ended sharply lower on Monday as financials led the retreat. The Dow Jones Industrial Average tumbled 239 points, the S&P 500 lost 23 points and the Nasdaq Composite lost 46 points.

Merrill Lynch dropped its bombshell announcement after the close of trading, saying it will issue $8,5-billion in new stock to investors including Singapore’s Temasek Holdings and sell $30,6-billion gross notional amount of US super senior collateralised debt obligations to an affiliate of Lone Star Funds for $6,7-billion, the newswire said.

On the JSE, Anglo American was up R6,10, or 1,47%, at R421,10 and BHP Billiton was R3,15, or 1,29%, higher at R246,99.

Sasol was down R3,99, or 1%, at R390,01.

Pulp and paper producer Sappi was off R2, or 2,53%, at R77.

Among gold miners, AngloGold Ashanti fell R5,75, or 2,28%, to R246,76, Gold Fields dropped R1,50, or 1,61%, to R91,50, but Harmony added 34 cents to R79,24.

Platinum miner Anglo Platinum was down R6 to R965 and Impala Platinum lost 60 cents to R230,40.

Elsewhere, Telkom shed 85 cents to R136,65. It said earlier that its 50%-owned cellular operator Vodacom has sold a 6,25% stake in its local operations to black investors in a deal valued at R7,5-billion.

MTN lost R3,50, or 2,72%, to R125.

Also in the news, speciality chemicals and explosives firm AECI was 50 cents firmer at R58,10, off its earlier high of R59,91, after saying its interim diluted headline EPS increased 35% to 323 cents. An interim dividend of 90 cents per share was declared.

Industrial giant Barloworld slipped R1,43, or 2,1%, to R66,57 while brewer SABMiller eased R2,15. or 1,33%, to R159,90.

Among banks, Nedbank was down R2,59, or 2,58%, to R97,81, Standard Bank lost R1, or 1,14%, to R86,50 and Absa shed R1,60, or 1,61%, to R97,50.

Liberty Group was off R1,80, or 2,92%, at R59,80. Earlier it said that for the six months ended June 2008 its headline earnings per share (HEPS) and the BEE normalised HEPS are expected to be between 40% and 50% lower than those reported in the first half of 2007. – I-Net Bridge

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