The JSE. Photo: Simphiwe Mbokazi.

The JSE closed in negative territory on Wednesday as the Barack Obama victory rally proved short lived after global investors shifted their focus to the looming fiscal cliff in the US — tax increases and spending cuts — and the parliamentary vote in Greece on new austerity measures.

Locally the gold mining sector buoyed the JSE due to a higher gold price and also boosted by a more than 6% surge in gold miner Harmony’s share price on Wednesday‚ due to solid quarterly results.

At 5pm the JSE all share index closed 0.34% lower at 37‚471.69 points‚ with the gold index surging 4.50% to close at 2‚483.96 points.

“The gold price was up a lot because of the US election result and expectations that the US will buy gold as an anti-inflation measure. We anticipated that gold miners will have a run today. Inflation is expected to rise in the US going forward because of their policies that are in place‚ with the fiscal cliff approaching‚ with taxes and less spending that will be inflationary‚” said Michael Carlsson‚ trader at Consilium Securities in Johannesburg.

At 5.02pm local time the gold price was quoted at $1‚715.36 per fine ounce from $1‚711.40 per fine ounce on Tuesday.

Major European markets pared initial gains and were trading in negative territory on Wednesday due to continued eurozone woes‚ with the London FTSE 100 seen trading 0.73% softer at 5pm local time.

News that Obama has won a second term as President of the US has prompted a rally in US treasuries but little response in other markets. The dollar was initially marked weaker versus most other currencies but has unwound this move‚ while equities are modestly firmer‚ Barclays said in a global daily note.

“With the Democrats retaining a majority in the Senate but a continued Republican majority in the House of Representatives‚ investors are likely to focus on discussions around the fiscal cliff‚” the bank added.

The fiscal cliff looms in January when tax cuts in the US are expected to be revoked and spending cuts implemented.

US stocks opened sharply lower on Wednesday with the Dow Jones Industrial index down 1‚33% at 13‚070.04 points at 4.47pm local time‚ due to fiscal cliff worries.

Local counters that showed movement on the JSE‚ were Harmony closing 6.03% higher at R72.31 after the gold producer’s net profit in the three months to September rose 388% to R522m from the June quarter. Gold production was 8% higher at 321‚924oz in the quarter.

AngloGold Ashanti (ANG) closed 4.02% higher at R300.00 and GoldFields (GFI) added 4.38% to R112.00.

ArcelorMittal (ACL) shed 2.44% to R33.17‚ while industrial company Barloworld (BAW) closed 2.19% higher at R74.24 after it said on Wednesday it expected its headline earnings per share in the year ended September to rise by between 40% and 50%‚ from 465 cents in the same period a year ago. - I-Net Bridge