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JSE down amid US economy worries

Sep 05 2011 09:57
I-Net Bridge

Johannesburg - The JSE tracked global stocks to open weaker on Monday as markets continued to respond to Friday's disappointing US jobs data. Markets were worried about growth prospects for the world's largest economy.

A local trader said the JSE opened weaker in line with the "performance in international markets." She said that although the US was closed for a holiday, US futures were still "pointing weaker". The trader also expected a "quiet day ahead, volume wise," due to the closed US market.

By 09:15 local time, the JSE All Share [JSE:J203] index was down 1.52%. Resources gave up 2.19%, and platinum counters declined 1.61%. Banks were 1.36% lower, while industrials lost 1.22%; financials shed 1.08%.

Gold, however, was up 0.17%.

The rand was bid at R7.11 to the dollar, from R7.06 at the JSE's close on Friday. Gold was trading at $1 884.99 a troy ounce from $1 874.12 at the JSE's previous close, while platinum was at $1 871/oz, from $1 875.20/oz previously.

Dow Jones Newswires reported European stock markets were expected to open sharply lower on Monday, weighed by losses across Asian markets after Friday's weaker than expected US monthly payrolls report kept global investors reeling and raised worries about the health of the world's largest economy.

It's hardly surprising to see the market on its knees on Monday given the weak overseas leads and US Labour Day holiday, said IG Markets. "Any confidence that had started to return to markets quickly evaporated as the jobs report showed zero jobs growth for last month. It wasn't just zero growth for August, but they also downgraded July's figure," it added.

Attention will be on this week's raft of key economic data releases and central bank meetings in Europe. Outside of economic data this week, the big focus is going to be on US President Barack Obama's speech on Thursday, where he is expected to detail his latest effort to create jobs. "With his approval ratings at all-time lows, he's going to need to release something pretty special to convince markets it will work," added IG.

Asian shares fell sharply on Monday. Japan's Nikkei Stock Average was down 1.9%, while at 08:55 local time, Hong Kong's Hang Seng Index had slumped 2.8%. Shanghai Composite Index was down 1.5%, and South Korea's Kospi Composite lost 4.1%.

 
jse  |  markets  |  us economy

 
 
 

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