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Johannesburg - The JSE opened weaker on Thursday, tracking
Asian stocks which were lower on disappointing Chinese economic data releases
and the US Fed Chairperson Ben Bernanke's announcement this week that the
economy was gloomy.
A local trader said that the Fed announcement was "not
what the markets were expecting" where the Dow finished lower and Asia was
also lower.
The trader noted however that the JSE was not trading as
weak as the other markets because of the rand weakness, which was "hedging
some of the losses". He said that initial jobless claims and leading
indicators in the US would likely be data to watch for markets on Thursday.
By 09:13 local time, the JSE All Share [JSE:J203] index had
lost 0.98%. Gold stocks collected 1.66%, while platinum miners dropped 1.89%
and banks gave up 1.70%. Industrials dipped 1.17%, financials were down 1.10%,
while resources shed 0.79%.
The rand weakened to R8.17 to the dollar, from R7.88 at the
JSE's close on Wednesday. Gold traded at $1 772.98 a troy ounce from $1 797.91
at the JSE's previous close, while platinum was at $1 738/oz, from $1 780.50/oz
previously.
Dow Jones Newswires reported that Asian shares dropped
sharply on Thursday, with several regional central banks suspected of
intervening to slow the US dollar's climb on safe-haven flows.
"It seems the markets have thrown in the towel and
nobody wants to re-enter the water," said Ben Taylor, sales trader at CMC
Markets in Sydney.
In a widely expected move on Wednesday, the Fed said it
would increase its share of longer-term Treasurys by $400bn by June 2012 by
selling shorter-dated holdings, a programme dubbed "Operation Twist,"
aimed at lowering long-term borrowing costs and boosting an ailing economy.
Investors, however, were rattled by the Fed saying there are
"significant downside risks to the economic outlook".
Hong Kong's Hang Seng Index shed 4.4% after earlier dropping
to a two-year low, and Australia's S&P/ASX 200 tumbled 2.6% after slipping
to a seven-week low in morning trade.
South Korea's Kospi Composite slid 2.8%, Japan's Nikkei
Stock Average closed 2.0% lower, China's Shanghai Composite lost 2.4% and
India's Sensex fell 2.2%.
Dow Jones Industrial Average futures were down 81 points in
screen trade.
