Global sentiment knocks JSE stride

Johannesburg - The JSE was sharply off early on Thursday, in line with global sentiment affected by concerns over a credible solution to the debt issues plaguing the eurozone.

A trader said that a raft of data out later in the day, led by US jobless claims was expected to drive markets.

She noted that US futures were in negative territory, along with markets in Asia amid uncertainty thrown up around the eurozone.

By 09:16 local time, the JSE All Share [JSE:J203] index dropped 1.27%. Gold waivered 1.41%, platinum miners declined 2.34% and resources shipped 2.06%.

Banks lost 0.72%, financials dropped 0.66%, and industrials gave up 0.90%.

The rand was bid at R8.08 to the dollar, from R7.98 at the JSE's close on Wednesday. Gold traded at $1 621.49 a troy ounce from $1 651.89/oz at the JSE's previous close, while platinum was at $1 487.50/oz, from $1 526.50/oz previously.

Dow Jones Newswires reported that European stock markets were expected to drop at the open on Thursday amid uncertainty over whether progress would be made on the region's debt crisis at a key European Union summit this weekend.

Traders said investors were confused by news headlines recently on developments in tackling the crisis that seem to contradict each other. "Sentiment has been dampened by reports (on Thursday) of a split between France and Germany over the best way to boost the European bailout fund. The news trumped Wednesday's reports that Germany and France will boost the size (of the fund)," said Stan Shamu, a strategist with IG Markets.

On Wednesday, French President Nicolas Sarkozy paid an unexpected trip to Frankfurt to the farewell event of European Central Bank President Jean-Claude Trichet to meet German Chancellor Angela Merkel, European Union Council President Herman Van Rompuy, European Commission President Jose Manuel Barroso, head of the International Monetary Fund Christine Lagarde, Trichet and his replacement, Mario Draghi.

Merkel said on Wednesday that the meeting of EU heads of state this coming Sunday would not be the final step needed to regain market confidence, but it was seen as an important step in that direction. She repeated her belief that if the "euro fails, Europe fails, but we won't let that happen" while speaking at Trichet's farewell event.

However, both Sarkozy and Merkel failed to provide reassurances that they were making progress in working out a deal to boost the bailout fund.

Asian stock markets fell on Thursday as concerns over Europe's ability to come up with a credible fix to the eurozone debt crisis shook confidence. Japan's Nikkei Stock Average dropped 1.0%, while South Korea's Kospi Composite slipped 2.0%. Hong Kong's Hang Seng Index fell 2.3%, while China's Shanghai Composite fell 2.0%.