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JSE down on emerging market jitters

Johannesburg - Tuesday's uptick in commodity share prices on the JSE did not last long. By Wednesday midday the resources index had lost almost 1% of its value, and the rest of the market followed.

Analysts said Tuesday’s improvement in the resources sector was of a technical nature, because resources stocks were oversold after days of profit taking. Fundamental prospects did not look all that good, amid continuing uncertainty over the Chinese economy's prospects.

By midday the resources index dropped 503,4 points or 0.91% to 55 100. The All-share index was 368,69 points or 0.77% down on 47 264 and the Top 40-index traded 395,14 points or 0.92% lower on 42 661. Retailers and banks were also big losers.

The exception was again the gold sector, supported by a higher gold price and weaker rand.

The market is still reeling after the shock news earlier this week that Chinese exports dropped sharply, and credit data released since then has added to the concerns about an economy which is a major buyer of industrial commodities like iron ore and copper.

Investors are now hoping that Chinese data on industrial output, retail sales and urban investment due on Thursday might offer some clarity on where the economy is heading.

Emerging market jitters are also hovering because the crisis in Ukraine has still not been resolved and a standoff is lurking. Ukraine's acting president announced the formation of a volunteer national guard, while ousted leader Viktor Yanukovich insisted he remained the legitimate leader.

The market did not respond much on the mixed signals from the South African Reserve Bank’s quarterly bulletin. The current account deficit narrowed more than expected in the final quarter of 2013 as exports outpaced imports to reduce the shortfall on the trade account, but retail sales contracted 3.6% over the same period.

Among the large resources stocks Anglo American [JSE:AGL] was down 1.29% at R258.24 and oil company Sasol [JSE:SOL] slipped 1.32% to R577.29 after reaching an all-time high on Tuesday.

The gold index was 34,86 points or 2.2% higher on 1 608. Gold shares are supported by the higher gold price and weaker rand, which are both driven by the current political uncertainty.

The gold price at midday was 0.55% higher on $1 355,39, but the rand price per kilogram increased by 1.02% to R475 196.

Gold miner Harmony [JSE:HAR] surged 2.8% to R37.109‚ while Gold Fields [JSE:GFI] advanced 3.52% to R43.85.

Naspers, the biggest domestic company listed in Johannesburg, was down 2.41% to R1 321.50. On Tuesday the share rose 3.8% to extend gains so far this year to 23%.

Its money spinner, No 1 Chinese internet company Tencent Holdings, is purchasing a stake in China's second-biggest e-commerce firm, JD.com.
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Rand - Dollar
18.91
+0.1%
Rand - Pound
23.87
+0.1%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.31
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent-ruolie
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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