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JSE weaker as commodities weigh

South African stocks remained in the red at midday on Tuesday as commodities stocks continued to weigh.

Precious metals prices remained under pressure after sharp falls overnight.

However some shares were off their earlier worst levels.

By noon, the all-share index was off 1,53%, led by a 1,71% decline in the resources index, a 4,32% fall in the platinum mining index and a 0,66% decline in the gold mining index.

Banks were off 2,08%, financials eased 1,83% and industrials edged down 1,16%.

The rand was bid at 7,73 to the US dollar from 7,70 when the JSE closed on Monday, while gold was quoted at $794,17 a troy ounce from $792,80/oz
at the JSE’s last close. However this was off the intraday worst level of $782,05 seen earlier in the day.

Platinum was last trading at $1 326.50/oz — down $58,50/oz from its overnight close.

Dow Jones Newswires reported that platinum prices earlier fell to an 11-month low of $1 297,50 a troy ounce, down 5,8% on the New York close.

Platinum shed nearly 6% against a gloomy demand backdrop and talk of carmakers offloading surplus inventory.

Meanwhile, US stock futures edged lower on Tuesday ahead of data on inflation and housing starts and earnings from retailing giants Home Depot and Target Corp.

S&P 500 futures fell 2,9 points to 1 279,20 and Nasdaq 100 futures fell 5,25 points to 1 938,25. Dow industrial futures fell 21 points, Dow Jones reported.

US stocks ended sharply lower on Monday, albeit on lacklustre volumes, after a Barron’s article rekindled fears that Fannie Mae and Freddie Mac could be nationalised, with a pullback in the dollar and a bounce in commodities also exacting a toll.

Asian indexes declined on Tuesday on fears about US financial and housing markets, and in Australia, many mining shares fell. The Nikkei ended 2,3% lower, while in London, the FTSE100 was last down 1,14%.

Traders said shares on the JSE were following the global trend, while the resource-heavy local market was weighed down by gold and platinum miners.

One local trader said that the JSE was starting to react positively to the release of local GDP data, which came in at the higher end of analysts’ expectations.

“If you look at the mining sector contribution, there is a possibility of a ramp up in production if Eskom allows it, and this is very positive for next year,” said the trader.

Mining and quarrying contributed 0,8 of a percentage point to overall growth.

South Africa’s real gross domestic product (GDP) at market prices on a quarter-on-quarter (q/q) seasonally adjusted annualised (saa) basis rose by 4,9% in the second quarter of 2008 from 2,1% in the first quarter,
Statistics South Africa said on Tuesday.

Non-seasonally adjusted year-on-year (y/y) GDP in the first quarter was placed at 4,5% from 4% in the first quarter.

Growth was expected to have increased by 5,2% on a quarter-on-quarter saa basis according to a consensus survey undertaken by I-Net Bridge.

The range of forecasts for quarterly growth was from 2,7% q/q to 6,8% q/q.

On the JSE, resource giant Anglo American was down R9,20, or 2,32%, at R388 and BHP Billiton shed R1,61 to R220,95.

Synthetic fuels maker Sasol retreated R2,30 to R384,20.

Gold miner AngloGold Ashanti was R1,31 weaker at R202,20, Gold Fields was off 58 cents to R65,42 and Harmony shed 13 cents to R57,38.

Among platinum miners Anglo Platinum fell R33,99, or 3,87%, to R845 and Impala Platinum fell R11,50, or 5,13%, to R212,75.

Among industrials, brewer SABMiller was off R1,48 at R164 and Bidvest was R4, or 3,64% lower at R106.

Among gainers were PPC, which was up 48 cents, or 1,5%, to R32,58.

Also bucking the trend was Grindrod, which was up 59 cents, or 2,53%, to R23,89, and Pick ‘n Pay, which added six cents to R27,

Standard Bank shed R1,62, or 1,84%, to R86,50 and Nedbank was off R2,31, or 2,16%, to R104,69. – I-Net Bridge

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