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Johannesburg - South African stocks closed flat
on Thursday as commodity shares, particularly the gold producers, pulled the
market lower after an overnight fall in the spot price and the strengthening of
the rand currency.
The blue-chip Top 40 - (Tradeable) [JSE:J200] index edged down 0.07% to 30 526.43
while the broader All Share [JSE:J203] index closed 0.01% up at 34 298.48.
Gold stocks declined in early trade after a 5% overnight
fall in the spot price after US Federal Reserve Chairman Ben Bernanke gave no
hints of a third round of quantitative easing.
While bullion clawed back some of its losses, adding more than 1% during the day’s trade, local gold stocks failed to catch up. The rand
also weighed as it added 0.5% on the day.
A stronger rand has a negative impact on local miners because most
of their costs are priced in the domestic currency but their product fetches
dollars.
The country’s top three gold producers all ended lower with Harmony
Gold Mining the worst hit. Its shares were knocked more than 3.7% to
R95.33 while rival Gold Fields closed 2.5% lower at R115.83.
Shares in AngloGold Ashanti, Africa’s largest gold producer, fell
2.45% to end at R317.75.
“It’s been a double negative for gold stocks with the gold price
falling on US Federal Reserve Chairman Ben Bernanke’s comments last night and
on the stronger rand,” said Afrifocus Securities portfolio manager Ferdi
Heyneke.
Heyneke said the entire precious metals complex was hit and
platinum stocks also had a bad day with the largest producers ending lower.
“While most were selling the gold stocks on the lower gold price,
the underlying trend in gold is still very much up,” said Heyneke.
The market was counter balanced by the performance of banking
stocks, which continued to curry favour with investors.
Shares in Nedbank and FirstRand also gained from the European
Central Bank’s (ECB) decision to inject cheap money into the regions stagnating
economy.
The ECB’s latest massive cash injection helped offset worries over
growth and boost European banks.
Both banks’ shares gained just over 3% with Nedbank’s shares
at R165.50, holding onto an 11-year high, while FirstRand’s shares closed at
R24.63. FirstRand is South Africa’s best performing banking stock this year.
Heyneke said despite the recent volatility he expected local
equities to hold steady as they head into the end of the week.
Advancers outnumbered decliners 151 to 130, with 194 million shares
changing hands.
