JSE softer‚ awaiting local dataComment on this story
The JSE opened in negative territory on Thursday amid quiet trade with investors awaiting local mining and manufacturing figures for September due out on Thursday.
At 9.26am the JSE all share index was trading 0.33% lower at 37‚345.00 points‚ the top 40 was down 0.37% and the gold mining index dipped 0.54% after a major surge of 4.50% on Wednesday due to gold that was bought because it is seen as an anti-inflationary measure in the US.
Inflation is expected to rise in the US going forward with the fiscal cliff approaching‚ with taxes and less spending that will be inflationary.
The election response in the US turned out to be quite aggressive‚ with equities dropping a sharp 2.5% and the dollar staging a late but large safe-haven recovery‚ Rand Merchant Bank said in a morning note.
“The market’s concern is that power in Washington is still split: Obama is back in the White House; the Republicans are still in the House of Representatives. This suggests ongoing ideological bickering and brings into focus the risk that the US will commit economic suicide by going over the fiscal cliff at year-end‚” the bank said.
“Greece’s parliament approved the new austerity bill late last night. The next step‚ which is likely to happen on Monday‚ is the Eurozone Finance Ministers allowing the country more time to meet the prescribed fiscal targets‚” it added.
“Markets this morning are relatively quiet. The US sell-off is being largely ignored elsewhere and the futures are pricing some bounce back from Wall Street. This suggests that the rand will not play late catch-up to the US moves‚” it said.
Locally shares that showed movement were Hulamin up 2.67% at R3.85 and Eastplats up 3.14% at R1.64‚ while Afrox shed 2.11% to R19.50. - I-Net Bridge