Publications
Partners
Johannesburg - Renewed tension in the Ukraine put a damper on stock markets worldwide and the JSE did not escape the fall-out on Friday morning.
Although the South African economy has no direct exposure to that region, international investors tend to flee to safe havens such as US bonds in a time of crisis and avoid high-risk investments like emerging markets.
The JSE is still very dependent on the inflow of funds from investors from developed countries seeking higher yields than the record low interest rates in their own countries, who are prepared to accept higher risks.
By midday on Friday the All-share index was 0.55% lower at 50 850 and the Top 40 index dropped 0.64% to 45 547. Overseas investors are usually interested in shares with big market capitalisations and if they sell these shares, it weighs heavily on the indices.
The rot in the markets started on Thursday when Wall Street closed lowerand on Friday morning Asian markets, which had been running strongly earlier in the week, followed the US markets lower.
The losses on Wall Street were modest, as some good news on the US economic front softened the blow.
The markets were spooked when Ukraine's security and defence council said the border town of Novoazovsk and other areas of Ukraine's south-east had fallen under the control of Russian forces, together with rebels.
The US accused Russia of active fighting in eastern Ukraine and said it was considering a range of responses, including more sanctions.
While few US companies have heavy exposure to either country, investors are concerned about the potential response by the United States and Europe to any escalation in hostility.
Any sanctions against Russia can lead to counter-measures from the Russians which could harm the European economy in particular, as this region is heavily dependent on Russian gas supplies.
In a time of crisis the gold price usually rises, but it did not happen on Friday morning. Gold shares were therefore lower and the gold index lost 0.66%.
Among the other indices the Financial index dropped 0.62%, the Industrial index was 0.67% lower and the Resource index 0.51%.
Resources were the big losers the previous two days on concerns about low iron prices, which pushed the share prices of iron ore producers to record lows. On Friday morning Kumba Iron Ore [JSE:KIO] and Assore [JSE:ASR] still traded at 52-week lows. Kumba lost only 0.37% to R318.21, but Assore dropped another 4.35% to R307.54.
Among the bigger shares, Anglo American [JSE:AGL] was 0.55% lower at R266,41 and BHP Billiton [JSE:BHP] traded 0.30% weaker at R329.99.
Impala Platinum [JSE:IMP], which lost more than 7% of its value on Thursday after announcing a drop of 74% in earnings for the past year, traded another 1.31% lower at R95.73.
READ: Implats reviewing options to restore profits
In the industrial sector big shares like SABMiller [JSE:SAB], Richemont [JSE:CFR] and Naspers [JSE:NPN] were all lower. SABMiller was 0.34% softer at R582.58 and Richemont 0.60% at R101.60. Both shares, which traded at 52-weeks high recently, have now been more than 5% lower for the past month.
Naspers lost 1.52% to R1 354.15 but the share has still been 5% higher for the last 30 days.
- Fin24
Although the South African economy has no direct exposure to that region, international investors tend to flee to safe havens such as US bonds in a time of crisis and avoid high-risk investments like emerging markets.
The JSE is still very dependent on the inflow of funds from investors from developed countries seeking higher yields than the record low interest rates in their own countries, who are prepared to accept higher risks.
By midday on Friday the All-share index was 0.55% lower at 50 850 and the Top 40 index dropped 0.64% to 45 547. Overseas investors are usually interested in shares with big market capitalisations and if they sell these shares, it weighs heavily on the indices.
The rot in the markets started on Thursday when Wall Street closed lowerand on Friday morning Asian markets, which had been running strongly earlier in the week, followed the US markets lower.
The losses on Wall Street were modest, as some good news on the US economic front softened the blow.
The markets were spooked when Ukraine's security and defence council said the border town of Novoazovsk and other areas of Ukraine's south-east had fallen under the control of Russian forces, together with rebels.
The US accused Russia of active fighting in eastern Ukraine and said it was considering a range of responses, including more sanctions.
While few US companies have heavy exposure to either country, investors are concerned about the potential response by the United States and Europe to any escalation in hostility.
Any sanctions against Russia can lead to counter-measures from the Russians which could harm the European economy in particular, as this region is heavily dependent on Russian gas supplies.
In a time of crisis the gold price usually rises, but it did not happen on Friday morning. Gold shares were therefore lower and the gold index lost 0.66%.
Among the other indices the Financial index dropped 0.62%, the Industrial index was 0.67% lower and the Resource index 0.51%.
Resources were the big losers the previous two days on concerns about low iron prices, which pushed the share prices of iron ore producers to record lows. On Friday morning Kumba Iron Ore [JSE:KIO] and Assore [JSE:ASR] still traded at 52-week lows. Kumba lost only 0.37% to R318.21, but Assore dropped another 4.35% to R307.54.
Among the bigger shares, Anglo American [JSE:AGL] was 0.55% lower at R266,41 and BHP Billiton [JSE:BHP] traded 0.30% weaker at R329.99.
Impala Platinum [JSE:IMP], which lost more than 7% of its value on Thursday after announcing a drop of 74% in earnings for the past year, traded another 1.31% lower at R95.73.
READ: Implats reviewing options to restore profits
In the industrial sector big shares like SABMiller [JSE:SAB], Richemont [JSE:CFR] and Naspers [JSE:NPN] were all lower. SABMiller was 0.34% softer at R582.58 and Richemont 0.60% at R101.60. Both shares, which traded at 52-weeks high recently, have now been more than 5% lower for the past month.
Naspers lost 1.52% to R1 354.15 but the share has still been 5% higher for the last 30 days.
- Fin24
