Johannesburg - The JSE opened weaker on Monday, as was to be expected following the declines on global markets on news of the
Goldman Sachs charges.
By 09:12 the JSE all share index was off 1.04%, with resources 1.17% weaker, gold miners off 0.56% and platinum miners 1.62% weaker. Banks were 1.83% lower, financials shed 1.57%, while the industrial index edged down 0.56%.
The rand was bid at R7.42 to the dollar from R7.38 at the JSE's close on Friday. Gold was quoted at $1 133.18 a troy ounce from $1 141.41/oz at the JSE's last close. Platinum was at $1 678/oz from $1 706/oz at the JSE's last close.
A local trader said the JSE's losses had been expected.
"We knew it was going to happen after the falls on world markets. The rot actually started on Friday afternoon with news of the Goldman Sachs charges and it has just continued this morning.
"The gold price is weaker and although the rand is weaker, it is not offering much respite.
"The market has had a good run up and was looking a bit toppish, so it will react on any negative news. We will just continue to watch world markets and particularly the Dow for direction today," the trader added.
Dow Jones Newswires reported ongoing airline travel chaos will add to downward pressure on stocks, which are already reeling from concerns about Greece's debt and the fallout from US charges against Goldman Sachs.
'Bombshell hits'
For Monday's opening, IG Markets is calling the FTSE down 18 at 5726, the DAX off 19 at 6162 and the CAC off 28 at 3959.
The US Securities and Exchange Commission, in a civil suit, accused Goldman of "defrauding investors by misstating and omitting key facts about a financial product tied to subprime mortgages as the US housing market was beginning to falter." The news shapes up as a major blow to financial stocks. The Dow closed off more than 1% on Friday.
"Just when things were looking rosy and the equity markets continued their grind upwards...this bombshell hits," said Angus Campbell at Capital Spreads. "It's still too early to say we reached the top for equity markets, but over the next few weeks it'll be difficult to hold onto gains."
Meanwhile, investors will continue to keep a watchful eye on Greece as it moves closer to requesting use of the EU emergency loan facility.
Armando Guglielmetti, senior strategist at InvestNews.ch, figures the impact on financial issues from the Goldman Sachs news will provide a buying opportunity in the sector. He also looks for improving fundamentals and earnings to aid other sectors.
US stock futures are lower on Monday after markets tumbled on Friday on the SEC's action against Goldman Sachs Group, adding to the market's pessimism after the disappointment over earnings from a range of companies, including Bank of America, General Electric and Google.
Asian stocks also tumbled on Monday as financial firms took hits from news that Wall Street giant Goldman Sachs had been charged with misleading investors.
The news hit sentiment on concerns the US Securities and Exchange Commission might conduct a wider crackdown on those that bet on the collapse of the housing market.
Chinese shares were also hit by news that Beijing had moved to further restrict property speculation with a new set of measures, while the Icelandic volcano that shut air space across northern Europe hit Asian airline shares.
In Japan the Nikkei 225 ended down 1.7%, while the Hang Seng was off 2.45%.
- I-Net Bridge