JSE pulled down by resourcesComment on this story
The JSE was in negative territory on Tuesday morning with resources leading the downside and industrials relinquishing some value after being the biggest gainer on the bourse on Monday.
At 9.27am‚ the JSE all-share index was 0.56% lower at 37‚255.16 points‚ with the top 40 index shedding 0.69% to 33‚016.26 points. Resources gave back 1.01% and industrials were 0.42% softer.
Asian markets were lower with the Japanese Nikkei 225 closing down 0.18%‚ while the Hong Kong Hang Seng index was last seen 0.93% lower.
Meanwhile in the US‚ less than a week after the results of the US elections‚ politicians are drawing the battle lines for the upcoming negotiations over how to avoid pushing the world’s largest economy over the fiscal cliff and into a recession.
“President Obama made it clear that he would push hard to shift the tax burden towards wealthy Americans. It is‚ however‚ a well-known fact that his Republican rivals are opposed to this. That said‚ the Financial Times carries a story this morning that suggests some Republicans may be more open for President Obama’s suggestion after his victory last week. While we expect the US to avoid the cliff‚ we are bracing ourselves for a bumpy ride in financial markets until an agreement is reached‚” Rand Merchant Bank said in a morning note.
“Concerns over Greece’s ability to secure another much-needed bailout package were fuelled yesterday by a very public disagreement between the head of the IMF and the chair of the Eurogroup of finance ministers over when Greece’s debt levels must have fallen to 120% of GDP. It seems as if the IMF favours a shorter period which will then involve further debt write-offs‚ while the eurozone ministers are against any significant debt relief and would rather allow Greece more time to repay its debt‚” RMB added.
“The disagreement highlighted once again the significant challenges that Greece and the rest of the eurozone need to overcome to ensure the single currency area remains intact. For now‚ the markets remain concerned that Greece may be pushed over its own fiscal cliff within the next few weeks‚ if they don’t receive the bailout package soon. On this score‚ it is worth noting that the embattled country will need to roll over €5bn of Treasury bills on Thursday‚” RMB said.
On the local front Anglo American (AGL) dipped 2.19% to R250.00 after the miner said on Tuesday that it was carrying out a detailed cost review to assess the effect of the already announced delay and the other disruptive challenges faced by the Minas-Rio iron ore project‚ which included high cost inflation across the construction industry in Brazil.
Anglo American Platinum (AMS) gave up a further 1.11% to R378.82‚ having shed 2.26% on Monday‚ after the world's primary producer of platinum said it had raised its offer to end the eight-week strike at its Rustenburg‚ Union and Amandelbult mining operations.
On the gold front‚ AngloGold Ashanti (ANG) slipped 0.31% to R294.10‚ DRDGold (DRD) shed 2.98% to R6.51 and Wits Gold (WGR) tumbled 16.67% to R15.00.
Kumba Iron Ore (KIO) dropped 2.22% to R529.01 after a trading update on Tuesday morning forecast a 20% drop in full year earnings.
In the construction industry‚ Group Five (GRF) climbed 3.17% to R27.30‚ while cement manufacturer PPC (PPC) dipped 1.31% to R27.83 after the company on Tuesday reported diluted headline earnings per share of 160 cents for the year ended September from 164 cents a year ago. - I-Net Bridge