Johannesburg - The JSE was in the red at noon on Thursday as Europe concerns continued to plague investors.
A local trader noted apprehension in Europe around the French bond sale, which had investors considering the rate at which the sale would take place.
"There is also a bit of profit taking after a good run this week."
Commodities prices have also weakened slightly on the back of a weaker euro, which is causing some investors to retrieve some of their gains.
At noon local time, the JSE
All Share [JSE:J203] index had declined 0.51%. Gold stocks were down 1.34%, resources withered 0.89% while platinum shares were in flat territory (-0.08%).
Banks lost 0.58%, industrials shipped 0.32% and financials shed 0.18%.
The rand was bid at 8.20 to the dollar from 8.11 at the JSE's close on Wednesday. Gold traded at US$1,613.59 a troy ounce from US$1,610.71 at the JSE's previous close, while platinum was quoted at US$1,416/oz, from US$1,427.50/oz at the previous close.
Dow Jones Newswires earlier reported that European stocks were in the red on Thursday as jitters about sovereign debt crept back in, ahead of a closely-watched French bond auction.
At noon local time, Paris's CAC-40 was 0.67% lower and London's FTSE 100 was down 0.26%.
Sovereign-debt worries were back in focus on Thursday, following news on Wednesday that overnight deposits at the European Central Bank reached an all-time high, suggesting that European banks are still nervous about lending to each other.
At the same time, investors were nervously awaiting the results of a bond auction by France, which is struggling to cling on to its triple-A credit rating, after it was put on negative outlook by both Fitch and Standard & Poor's.
With this in mind, investors will watch closely as France taps the market for EUR7 billion (US$9.06 billion) to EUR8 billion in a range of longer-dated bonds. Despite worries over France's rating, ING said it fully expects this morning's auction to be covered in excess of EUR10 billion.
The results of the auction are expected at around 05:00 ET.
Meanwhile, traders digested disappointing German retail sales data, which showed a fall in November, compared with expectations for a 0.5% increase. The monthly decline isn't good news, said Newedge. However, it pointed out that German retail sales are a very volatile series and are often heavily revised.
Thursday's tone may have been downbeat, but an equity strategy note by Citigroup seemed to suggest the outlook for 2012 may be brighter than most expect.
Citigroup said equities will likely make healthy gains over the next 12 months as investors' worst fears fail to materialise. It said that while markets are already discounting a 20% contraction in global EPS, this is too pessimistic, even for recessionary Europe. Citigroup expects contrarian strategies - buying last year's losers and selling the winners - to start the year strongly.
In Asia, most stock markets were mixed on Thursday, as fresh eurozone concerns hit confidence.
Japan's Nikkei Stock Average fell 0.83%, while Hong Kong's Hang Seng Index gained 0.46%.