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JSE down on Chinese PMI‚ Bernanke

Johannesburg - South African stocks finished well down on Thursday as signs of weakness in China’s manufacturing sector worsened the blows from the outcome of the US monetary policy meeting on Wednesday.

The JSE All Share [JSE:J203] index closed significantly lower‚ losing 3.06% to 39 536.08 points. Platinum miners‚ which tumbled 4.30%‚ were hardest hit‚ followed by the gold index‚ which fell 3.73%.

“We expected a sell-off from the start given the market was still digesting Bernanke’s comments of potentially reducing stimulus in the market later this year if the US economy continues to strengthen‚” said Travis Robson‚ head of premium clients at IG.

”But weaker than expected Chinese PMI data put further pressure on the market‚” he said.

China’s HSBC flash purchasing managers index (PMI) showed manufacturing activity dipped to 9-month lows in June at 48.3 points from 49.2.

An optimistic inflation outlook from the US sent the gold price tumbling as investors fled from the safety of the yellow metal. At 6.01pm local time the spot gold price was at a two-and-a-half-year low of $1‚295.36 an ounce.

“Generally gold is seen as the financial Armageddon when the economy is in a bad state‚” said Chris Gilmour‚ analyst at Absa Capital.

“But things are beginning to look better for the US economy so there is less of a reason to be in gold‚” said Gilmour.

Recent US economic data has painted a solid picture for the growth of the world’s largest economy with US inflation now expected to come in between 0.8% and 1.2%‚ the Federal Reserve said after its monetary policy meeting on Wednesday.

Expectations of easing US inflation prompted the dumping of gold assets in favour of dollar buying.

All the indices on the JSE closed substantially lower with industrials dropping 3.05%‚ resources shedding 3.30% and financials losing 2.74%

In Europe London’s FTSE 100 had given up 2.98% by 6pm local time‚ while across the Atlantic‚ the Dow Jones was down 1.34% at the same time.

Among individual shares on the JSE‚ Kumba Iron Ore (KIO) plummeted 7.59% to R445.50 and Exxaro (EXX) lost 4.46% to R137.

In the general resource sector Anglo American (AGL) was down 2.65% to R214.90‚ BHP Billiton (BIL) shed 3.52% to R273 and Sasol (SOL) gave up 2.82% to R427.31.

Anglo Platinum fell 4.85% to R295 and Gold Fields (GFI) lost 4.19% to R55.35.

Among industrials SABMiller (SAB) fared worst‚ down 3.39% at 493.12.

In the retail sector Woolworths (WHL) plunged 5.52% to R63.

Banker FirstRand (FSR) dropped 3.51% to R27.24 and RMB Holdings (RMH) slumped 4.32% to R36.55.

Sanlam (SLM) gave up 4.67% to R42.90.

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Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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