JSE ends weaker on risk aversion

Johannesburg - Shares on the JSE slid on Friday as worse than expected US GDP data heightened risk aversion, while continued uncertainty about the US debt situations also weighed on investor sentiment.

The US faces a technical default if a fiscal agreement is not reached and the debt ceiling raised by next week Tuesday.

By 17:00 local time, the JSE All Share [JSE:J203] index was down 0.76% to 31,208.04 points, with resources losing 1.46%, platinum miners tumbling 2.17% and gold miners giving up 0.09%. Banks lost 0.36%, financials were down 0.34% and industrials were off 0.35%.

The rand was bid at 6.70 to the dollar, unchanged from the previous JSE's close on Thursday. Gold was quoted at US$1 627.16 a troy ounce from US$1 608.34 at the JSE's previous close, while platinum was at US$1 784.50/oz, from US$1 790/oz previously.

Kevin Algeo, market commentator at Imara SP Reid, said: "The general theme for this week has been the US debt ceiling, which to this day remains unresolved. But as for today, we saw the market sell off in the afternoon session due to poor US GDP numbers."

Dow Jones Newswires reported that US stocks fell on Friday at the open, moving sharply lower after the government said the economy expanded at a slower pace than expected and as investors grappled with the House of Representatives' decision to postpone a vote on a new debt plan.

Investors grew more anxious after the US Commerce Department reported that GDP rose at an annualised seasonally adjusted rate of 1.3% in April through June, while first-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain.

Economists surveyed by Dow Jones Newswires expected GDP to rise 1.8% in the second quarter. The data confirms the economy's weakness in the first half of 2011, as the recovery has failed to gain traction two years after the end of the deep recession.

The Dow Jones Industrial Average had dropped 0.69% to 12 156.14 points by 17:00 local time.