The JSE sank deeper into the red by noon on Wednesday with resources and precious metals leading the downside as negative sentiment from abroad continued to weigh.
By 12.03pm, the JSE all-share index had fallen 2,45%, with resources giving up 3,27% and platinum counters shedding 7,17%. However, gold miners gained 2,70%.
Banks lost 2,04%, financials weakened 2,46% and industrials were down 1,40%.
The rand was last bid at 10,27 to the dollar, from 10,31 when the JSE closed on Tuesday. Gold was quoted at $862,95 a troy ounce from $856,25/oz at the JSE’s last close, and platinum was at $936/oz,
unchanged from its previous close.
“We are following the trend of overseas markets, particularly the US which failed to rally as hoped,” a local trader said.
“The situation out there is still bad, banking stocks are still pressured. With the exception of gold stocks, metals continue to come under pressure too.
“Gold stocks are strong and the price continues to rise with the strengthening dollar. That indicates that people are seeking a flight to safety and the sentiment is that gold stocks are a safe haven.”
He said that markets may continue to drift lower and could get back to deeply oversold levels again. Bargain hunting will then seep in at those levels.
“It doesn’t look like there is recovery just yet. The rand is weak but is not helping the market. The negative sentiment is overpowering the rand effect at the moment. We will just have to wait and see,” he added.
Dow Jones Newswires reports that the FTSE 100 slumped towards the key 4 000 mark. Joshua Raymond at City Index warned that if the FTSE 100 closes below the 4 000 level, the market could weaken even further in the near term.
Additionally, economists place emphasis on the Bank of England’s meeting minutes and the UK claimant jobless count. Data showed that jobless claims in the UK rose 77 900 in December, and the unemployment rate in the three months to November rose by 0,4 percentage points to 6.1%.
The FTSE was last down 1,80%.
US stocks are picked to open higher on the back of short covering after Tuesday’s heavy sell off, said Martin Slaney, trader at GFT Global Markets.
On the JSE, Anglo American gave up R8,94, or 4,71%, to R181,06 and BHP Billiton lost R6,86, or 4,15%, to R158,32.
BHP Billiton said earlier that it would immediately commence the safe ramp down and indefinite suspension of the Ravensthorpe Nickel Operation in
Australia.
As a consequence, Yabulu (Australia) will cease processing mixed nickel cobalt hydroxide product from Ravensthorpe and will revert to processing ore
only.
The company said that for the six months ended December 31 2008, it spent $357-million on minerals exploration, of which $313-million was expensed. It also sanctioned two development projects during the quarter, being the Western Australia Iron Ore Rapid Growth Project 5 (RGP5) and the North West Shelf Cossack, Wanaea, Lambert, Hermes (CWLH) Life Extension projects.
Sasol was off R5, or 1,88%, to R260,50.
Highveld Steel shed R3,12, or 5,57%, to R52,88,
ArcelorMittal lost R1,30, or 1,86%, to R68,45 and Kumba Iron Ore weakened R1 to 134 rand.
Gold miner AngloGold Ashanti gained R8,21, or 3,14%, to R270 and Gold Fields firmed R3,50, or 4,20%, to R86,90.
Platinum miner Anglo Platinum fell R30, or 6,49%, to R432, Impala Platinum shed R9,99, or 7,51%, to R123,01 and Lonmin lost R7,45, or 6,03%, to R116,14.
In diversified miners, African Rainbow gave up R3,17, or 3,23%, to R94,91 and Exxaro weakened R2,15, or 3,28%, to R63,35, but Hulamin was up 14 cents, or 1,09%, to R13.
Among industrials, SABMiller lost R1,91, or 1,20%, to R156,84, Bidvest gave up R2,85, or 2,89%, to R95,80 and Barloworld shed R1,09, or 2,95%, to R35,90.
However, Imperial added R1, or 1,89%, to
Banker Standard Bank lost R2,11, or 2,74%, to R74,89, Nedbank was down R1,29, or 1,36%, to R93,31, Absa fell R1,90, or 1,90%, to R98,10 and FirstRand gave up 26 cents, or 1,84%, to R13,89.
Financial services group Old Mutual weakened 65 cents, or 7,83%, to R7,65 and Sanlam was down 45 cents, or 2,79%, to R15,70.
Furniture retailer Lewis was down R1,35, or 2,94%, to R44,50. The group said on Wednesday that its cumulative revenue growth for the nine months ended December 31 2008 was 5%. Revenue for the quarter ended December 2008 also increased by 5%.
Truworths lost 60 cents, or 1,72%, to R34,20, Pick ‘n Pay weakened 63 cents, or 1,87%, to R33,05 and Massmart shed R1, or 1,19%, to R83.
However, Woolies added 31 cents, or 2,42%, to R13,10.
Construction group Aveng was down 40 cents, or 1,46%, to R27 but Murray & Roberts collected R1,03, or 2,35%, to R44,93 and Group Five put on 34 cents, or 1,01%, to R34. The company announced earlier that it expected headline EPS for the interim period ended December to range between 45% and 55% higher than the same period a year ago. Earnings per share are expected to be between 30% and 40% higher.
Telecommunications group MTN lost R3,54, or 3,58%, to R95,46 and Telkom gave up R2,90, or 2,54%, to R111,10. – I-Net Bridge