JSE off lows despite euro-zone woes

The JSE board at Sandton, Johannesburg. Photo: Leon Nicholas

The JSE board at Sandton, Johannesburg. Photo: Leon Nicholas

Published Jul 12, 2011

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The JSE had moved off its worst levels by midmorning on Tuesday amid some bargain hunting, but concerns over the financial state of countries in the euro zone, with Italy in direct focus, still weighed on the market.

By noon local time, the JSE all-share index lost 0.67%, with banks down 0.25% and financials off 0.49%. Industrials shed 0.39%. Platinum miners declined 1.40%, resources moved 1.07% lower and gold miners contracted 0.20%.

The rand was bid at 6.89 to the dollar, from 6.84 to the dollar at the JSE's close on Monday. Gold was quoted at US$1,546.97 a troy ounce from US$1,545.13/oz at the JSE's previous close, while platinum was at $1,718.50/oz, from $1,725.50/oz previously.

A local trader said: "We are seeing carry-over from yesterday weighing on the local market, fuelled by concerns over the state of the euro zone, with Italy under the spotlight.

"The rand is weaker, which has added some support to the JSE, which is off its intraday worst levels, helped possibly by some bargain hunting. The overall picture, however, still doesn't look good, although there is talk over some lending measure to ease Italy's woes, which the market will focus on during the course of the week."

Dow Jones Newswires reported that fears that the European debt crisis would spill over into Italy, and also potentially Spain, prompted investors on Tuesday to dump global equities, the euro and peripheral euro-zone debt, in favour of traditional safe-haven assets such as the Swiss franc and core European government bonds.

European Union (EU) officials may well have agreed to give its sovereign rescue fund new powers on Monday, but the meeting failed to provide any real answers to Europe's rapidly worsening sovereign debt crisis, reinforcing the perception that European leaders are still struggling to catch up with the pace of unfolding events.

US stocks were seen lower on Tuesday, with traders still preoccupied with the European debt crisis. CMC Markets called the Dow Jones Industrial Average down 60 points at 12,446. "Markets appear to have lost confidence that EU leaders have the political will to be able to resolve the current debt crisis," said Michael Hewson of CMC Markets. He noted that earnings on Monday from Alcoa failed to inspire confidence, despite more than doubling second-quarter profit, and EU leaders failed to reach any significant agreements at their meeting on Monday.

On the data front on Tuesday, the minutes of the latest meeting of the Federal Open Markets Committee are due at 18:00 GMT.

On the JSE, Anglo American (AGL) lost 4.49 rand or 1.35% to 326.90 rand, BHP Billiton (BIL) gave up 3.03 rand or 1.15% to 260.76 rand and Sasol (SOL) fell 2.99 rand to 351 rand.

Gold miner Harmony (HAR) slid 54 cents to 88.70 rand.

Amplats (AMS) shipped 4.29 rand to 596 rand, Impala Platinum (IMP) lost 2.80 rand or 1.63% to 169 rand and Lonmin (LON) eased 3.34 rand or 2.21% to 147.60 rand.

Kumba Iron Ore (KIO) shed 3.06 rand to 502.94 rand.

Diversified miner Exxaro (EXX) moved 3.02 rand or 1.69% lower to 175.48 rand, and African Rainbow (ARI) dropped 1.43 rand to 187.07 rand.

Coal of Africa (CZA) was 14 cents or 1.56% worse off at 8.86 rand, but Optimum Coal (OPT) grew 50 cents or 1.89% to 27 rand.

Construction group Basil Read (BSR) was off 41 cents or 2.80% to 14.24 rand.

Financial services group Investec (INP) gave up 68 cents or 1.21% to 55.30 rand, and Old Mutual (OML) dropped 23 cents or 1.59% to 14.25 rand.

Retailer Foschini Group (TFG) lost 1.30 rand or 1.55% to 82.70 rand, and Truworths (TRU) waivered 1.06 rand or 1.47% to 71.14 rand.

Hotel and gaming group Sun International (SUI) lost 1.36 rand or 1.48% to 90.65 rand.

Astral Food (ARL) gave up 1.40 rand or 1.09% to 126.60 rand.

Media group Naspers (NPN) fell 1.84 rand lower to 366.16 rand. - I-Net Bridge

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