The JSE. Photo: Simphiwe Mbokazi.
The JSE. Photo: Simphiwe Mbokazi.

Commodity stocks weigh on JSE

By Time of article published May 17, 2012

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The JSE extended its losses at noon on Thursday, dragged down by a selloff in general mining shares, against the negative global investor sentiment backdrop.

The JSE had a 30 minute interruption this morning due to international connectivity issues, which have since been resolved.

At 12:06 local time, the JSE all-share index was down 1.08% to 33,431.24 points, with resources dropping 1.88%, which extends the sector's losses to 6.97% since the beginning of May.

Gold miners lost 1.22%, while platinum counters edged up 0.34%.

Financials were down 0.60%, banking stocks fell 0.21% and industrials shed 0.77%.

The rand was trading at 8.31 to the US dollar, from 8.29 at the JSE's close on Wednesday, while gold was quoted at US$1,547.90 a troy ounce from $1,546.53/oz at the JSE's previous close and platinum was at $1,443.20/oz, from $1,438.70/oz at the previous session.

“The market continues to be extremely volatile. The resource counters continue to be the main drag on the overall index due to uncertainty in Europe and the slowdown in the Chinese economic growth,” said Martin Strauss, market analyst at PSG Konsult.

Franklin Templeton Investments said in a research note that to the extent that the recent downturn in China was due to a slowdown in external demand, signs of improvement in the US and continued robustness in other parts of Asia should help support economic growth.

In addition, while the rate of consumer inflation in March was higher than expected, upstream inflationary pressure from producer prices appears limited, so there may be room for some easing of monetary and fiscal policy.

European stocks were lower on Thursday, as worries about contagion from Greece to other “peripheral” nations continued to weigh on investors' minds, while the results of Spain's latest bond auction saw borrowing costs rise, Dow Jones Newswires reported.

The UK's FTSE 100 index was down 0.71% to 5,366.74 points just before noon local time.

Spain sold EUR2.494 billion in bonds, which was at the upper end of the EUR1.5 billion to EUR2.5 billion range expected.

Asian markets ended mixed, stabilising after heavy selling on Wednesday, as worries subsided over Europe with Greece preparing to hold fresh elections in June.

Japan's Nikkei rose 0.90% while China Shanghai SE Composite finished up 1.4%.

On the JSE, Anglo American (AGL) was down R7.27, or 2.61%, to R270.85, BHP Billiton (BIL) fell R5.81, or 2.49%, to R227.31 and Sasol (SOL) dropped R5.05, or 1.40%, to R356.45.

AngloGold Ashanti (ANG) slipped R3, or 1.14%, to R260, Harmony Gold Mining (HAR) was down R1, or 1.35%, to R72.83 and Gold Fields (GFI) lost R1.34, or 1.36%, to R97.46. The gold producer earlier reported attributable group production of 827,000 gold equivalent ounces in the quarter ended March, similar to the corresponding quarter's 830,000 gold equivalent ounces a year ago, but 6% lower than the December 2011 quarter's 883,000oz.

Anglo American Platinum (AMS) bucked the trend, lifting R5.13, or 1.04%, to R497.13, while Lonmin (LON) dropped R4.36, or 4.07% to R102.86.

Among other miners, Kumba Iron Ore was off R14.65, or 2.75%, to R517.89.

Among telecoms, MTN (MTN) fell R2.85, or 2.09%, to R133.77 and Vodacom (VOD) declined R1.95, or 1.83%, to R104.70.

Among financials and banks, Absa (ASA) lost R1.79 or 1.16%, to R153.11 and Investec plc (INP, INL) was down 80 cents, or 1.84%, to R42.75. The international specialist banker and asset manager saw adjusted earnings per share decline by 26.4% from 43.2 pence to 31.8 pence for the year ended March. Headline earnings per share for the 12-month period were down 28.9% to 26.8 pence from 37.7 pence a year ago.

Pretoria Portland Cement (PPC) was up 23 cents to R29.23. The company reported an 8% rise in headline earnings per share to 77.6 cents for the six months ended March 2012 from 7.8 cents a year ago. - I-Net Bridge

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