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JSE in for a bumpy ride

Johannesburg - Stocks worldwide are in for a bumpy ride for a while, which includes the JSE. The All-share index seems to be stuck at levels just below 48 000, with the index moving marginally higher or lower.

On Wednesday morning the index was again slightly higher after losing ground on Tuesday. By midday the All-share index was 0.28% higher at 47 924, while the Top 40-index also gained 0.28% to 43 024. The major indices, including resources and industrials, were also slightly higher.

The market seems to be looking for direction. Although Wall Street closed higher on Tuesday night, the day's trading was again characterised by volatile swings with technical stocks still under severe pressure.

The reporting season on Wall Street started off reasonably well with good results from the Citigroup, Coca Cola and Johnson & Johnson, but according to Imara SP Reid the numbers of pre-earnings announcements by US corporations suggested earnings could be slightly less vibrant than expected.

Continuing uncertainty about the situation in the Ukraine, where there are now fears of a possible civil war, are also contributing to the uncertainty.

The local market was probably encouraged by better-than-expected growth figures from China, but these numbers do not mean the Chinese economy is out of the doldrums yet. South African commodity companies are still very dependent on strong economic growth in China for the export of their products.

It was announced on Tuesday that the Chinese economy grew 7.4% in the first quarter this year, compared to the same period last year. The figure was lower than the 7.7% of the final three months of last year and marks the fourth slowdown in the past five quarters, putting China on track for its worst annual performance since 1990.

However, it was slightly above the 7.3% forecast in a survey of 13 economists by AFP.

Economists said that despite the lower growth the economy is making progress with restructuring and economic transformation, but that there will still be downward pressure.

Strike may cause negative growth

The news on the local front is also not encouraging, with Old Mutual warning that the loss of mining production due to the strike in the platinum industry may mean that the South African economy will show no growth in the first quarter, or that growth may even be negative.

The strike may also lead to restructuring and job losses, with Anglo American indicating that it may sell the Rustenburg platinum operations operated by Anglo American Platinum.

Anglo American Platinum, whose share price reached a new 52-week high on Monday before losing ground on Tuesday, was again 0.34% higher at R490.16.

Sibanye Gold, which indicated earlier in the week that it wants to expand into platinum, rose sharply on Tuesday and reached a new 52-week high of R27.19 before losing ground towards the end of the day.

On Wednesday morning the share gained 0.75% to R26.85.

Tuesday's announcement sparked rumours that Sibanye wants to buy Amplats’ mines in Rustenburg, but that is not necessarily the case.

Anglo American did not move much and traded only 0.06% higher at R267.67.
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Rand - Dollar
18.88
+0.3%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+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 Crude
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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