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Johannesburg - The JSE closed in negative terrain on Wednesday‚ following global markets lower amid nervousness as world markets await US Federal Reserve chairman Ben Bernanke’s speech at 18:30 local time.
All eyes are on the outcome of the US Federal Open Market Committee’s meeting and Bernanke’s press conference afterwards‚ when he is expected to give clarity on its monetary policy stance.
At 17:00‚ the JSE All Share [JSE:J203] index closed 0.53% lower at 40 784.31 points‚ with gold counters the biggest losers due to rand strength and local mining labour concerns. The gold index closed down 2.24%.
Banks and financials also weighed‚ shedding 1.23% and 1.09% respectively‚ despite a firmer local currency.
US stocks edged lower in early trade‚ with the Dow Jones industrial average down 0.12% at 5.20pm local time. At the same time London’s FTSE 100 was down 0.36%.
“Local gold stocks traded lower due to rand strength and local labour problems. Everybody is just waiting to hear what Bernanke will say later on tonight‚” said Darren Grové‚ trader at Vunani Private Clients.
“There is a 50/50 chance that Bernanke will start tapering monetary stimulus‚ as he is stepping down next January‚ and a lot of guys are thinking he would like to been seen as the one that solved the market crisis‚” Grové said.
“If they give an indication that they are starting to cut monetary stimulus‚ it would be negative for all markets. Emerging markets would be knocked the most as investors will pull out of these countries and invest in more safe-haven markets such as the US and Europe‚” he said.
“We would probably see dollar strength and market participants would probably buy bullion itself‚ as it is seen as a safe-haven investment. At the moment markets are purely sentiment driven‚” he said.
“Banks were down a lot today‚ which is a bit unexpected as the local inflation number came out better than expected this morning‚ as did the current account print. These better numbers should have underpinned banks and rand strength should also have helped them‚ but it did not. The market is just very volatile at the moment‚” Grové said.
“There was also a bit of profit-taking today‚ after a strong day on Tuesday‚ which contributed to today’s lower prices‚” he said.
On the JSE Anglo American (AGL) was down 1.31% at R220.75‚ while Sasol (SOL) garnered 1.51% at R439.71.
AngloGold Ashanti (ANG) shed 3.30% to R153.80‚ Gold Fields (GFI) was down 2.40% at R57.77 and Gold One International (GDO) plummeted 11.43% to R1.55.
Coal of Africa (CZA) ran up 14.46% to end at R1.90 after the company said it had completed a definitive feasibility study into building a new R3.96bn coal mine called Makhado near Musina in Limpopo.
Among banks Absa (ASA) shed 2.26% to R141.70 and Standard Bank (SBK) gave back 2.03% to close at R107.50.
Famous Brands (FBR) gained 3.19% to R97 after it released a positive earnings report on Wednesday.
All eyes are on the outcome of the US Federal Open Market Committee’s meeting and Bernanke’s press conference afterwards‚ when he is expected to give clarity on its monetary policy stance.
At 17:00‚ the JSE All Share [JSE:J203] index closed 0.53% lower at 40 784.31 points‚ with gold counters the biggest losers due to rand strength and local mining labour concerns. The gold index closed down 2.24%.
Banks and financials also weighed‚ shedding 1.23% and 1.09% respectively‚ despite a firmer local currency.
US stocks edged lower in early trade‚ with the Dow Jones industrial average down 0.12% at 5.20pm local time. At the same time London’s FTSE 100 was down 0.36%.
“Local gold stocks traded lower due to rand strength and local labour problems. Everybody is just waiting to hear what Bernanke will say later on tonight‚” said Darren Grové‚ trader at Vunani Private Clients.
“There is a 50/50 chance that Bernanke will start tapering monetary stimulus‚ as he is stepping down next January‚ and a lot of guys are thinking he would like to been seen as the one that solved the market crisis‚” Grové said.
“If they give an indication that they are starting to cut monetary stimulus‚ it would be negative for all markets. Emerging markets would be knocked the most as investors will pull out of these countries and invest in more safe-haven markets such as the US and Europe‚” he said.
“We would probably see dollar strength and market participants would probably buy bullion itself‚ as it is seen as a safe-haven investment. At the moment markets are purely sentiment driven‚” he said.
“Banks were down a lot today‚ which is a bit unexpected as the local inflation number came out better than expected this morning‚ as did the current account print. These better numbers should have underpinned banks and rand strength should also have helped them‚ but it did not. The market is just very volatile at the moment‚” Grové said.
“There was also a bit of profit-taking today‚ after a strong day on Tuesday‚ which contributed to today’s lower prices‚” he said.
On the JSE Anglo American (AGL) was down 1.31% at R220.75‚ while Sasol (SOL) garnered 1.51% at R439.71.
AngloGold Ashanti (ANG) shed 3.30% to R153.80‚ Gold Fields (GFI) was down 2.40% at R57.77 and Gold One International (GDO) plummeted 11.43% to R1.55.
Coal of Africa (CZA) ran up 14.46% to end at R1.90 after the company said it had completed a definitive feasibility study into building a new R3.96bn coal mine called Makhado near Musina in Limpopo.
Among banks Absa (ASA) shed 2.26% to R141.70 and Standard Bank (SBK) gave back 2.03% to close at R107.50.
Famous Brands (FBR) gained 3.19% to R97 after it released a positive earnings report on Wednesday.
