JSE stocks dragged lower

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JSE1 Independent Newspapers The JSE. Photo: Simphiwe Mbokazi.

South African stocks were knocked back on Friday as mining firms collapsed on fresh fears the global slowdown would eat into an already softening demand for commodities.

Mining shares had risen earlier in the week on hopes of new global monetary easing to stem the economic decline in the euro zone.

But Johannesburg's Mining Index ended down 1.77 percent to 30,803.32, with the losses pushing down the Top 40 index 0.81 percent to 29,705.42. The broader All-share index dropped 0.71 percent to 33,665.71.

Platinum producers Lonmin and Impala Platinum were the Top-40's biggest losers with Lonmin shedding more than 4 percent to 98.39 rand and Implats almost 3 percent lower at 136.80 rand.

Global resources groups BHP Billiton and Kumba Iron Ore, which is majority owned by Anglo American , were both down by more than 2 percent.

Malcolm Moller, an equities trader at Vunani, said resources stocks slid because of lower commodity prices.

“I think the markets will be volatile for the next two weeks,” Moller said, adding market players would likely to sit it out until there was clarity of which way the euro zone will go after the Greek elections.

The rand and risky assets came under pressure late Thursday with investors disappointed Federal Reserve Chairman Ben Bernanke did not indicate whether the United States would embark on a fresh round of monetary stimulus.

Gold mining companies, however, bucked the trend with all of South Africa's largest producers edging higher despite the gold price's fall to a one-week low.

Africa's biggest fixed-line phone operator Telkom was also among the day's biggest losers.

The telecommunications company, which is majority state owned, reported a 33 percent drop in full-year earnings and said it was suspending its full-year dividend in favour of an 18-22 billion rand capital expenditure programme.

Earlier this week, the government blocked South Korea's telecom giant KT Corp from acquiring a 20 percent stake in Telkom, scuppering the African operator's plans to turnaround its ailing business.

Shares in Telkom fell almost 2 percent to 124.38 rand.

Decliners outnumbered advancers 158 to 133 and 73 stocks remained unchanged. A total of 173 million shares changed hands. - Reuters


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