JSE lower‚ focus on Jackson Hole

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JSE1 Independent Newspapers The JSE. Photo: Simphiwe Mbokazi.

The JSE was lower on Thursday morning led down by mining shares‚ due to negative trade data from the east.

At 9.45am the JSE all-share index was down 0.58% to 35‚528.32 points‚ with resources and gold miners both 1.31% weaker. Asian and European markets were also seen weaker.

“The focus is on Jackson Hole tomorrow‚ but I do not think they are going to implement a third round of quantitative easing (QE3). I think they will keep this type of ammunition for when things get really bad in the US economy. The US’s pending home sales data print was better than expected with a bit of a turnaround seen in the US economy. In the past few weeks markets have been pricing in QE3 and I think we are set up for disappointment‚” said Michael du Plooy‚ stockbroker at PSG Konsult in Pretoria.

Credit Suisse also said that there was a risk that Jackson Hole on Friday could disappoint.

“In his speech on Friday‚ chairman of the Federal Reserve‚ Ben Bernanke‚ is likely to discuss the effectiveness of the unconventional monetary policy of the past years. Markets will focus on signals of whether more of the already-used arsenal is imminent and references to possible additional tools that the US Federal Reserve could employ. The August FOMC meeting minutes already point to an increased willingness to ease further and Bernanke is likely to again sound dovish‚” the bank said in a note.

“However‚ a first step could just be the extension of verbal guidance by promising near-zero rates for even longer. A bolder move and strong indication of QE3 is possible‚ but already-high market expectations imply some disappointment risk‚” it added.

Local stocks that showed losses were Anglo American (AGL) shedding 1.51%‚ to R239.50 and BHP Billiton down 1.54% to R250.00.

Gold miners Anglogold Ashanti (ANG) dropped 1.45% to R260.16 and Harmony (HAR) shed 2.00% to R73.49.

Amongst other miners Exxaro (EXX) lost 2.63%‚ to R153.75 and Kumba Iron Ore (KIO) was down 1.55%‚ at R507.00. - I-Net Bridge


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