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JSE opens on the back foot‚ awaits Fed

Johannesburg - The JSE opened the morning on the back foot as basket selling dented equities despite futures pointing to a positive start.

“Early indications from the futures this morning were for a positive start‚ but as soon as the market opened‚ basket selling dragged the index lower‚” said Ryan Wibberley‚ head of equity dealing for emerging markets at Investec Asset Management.

“Futures close out takes place tomorrow and derivative-related activity is dominating the market and providing a fair degree of volatility,” he said.

At 10:13‚ the JSE All Share [JSE:J203] index was down 0.78% at 40 683.99 points‚ with banks down 2.45% and financials losing 1.84%

The driver of markets on Wednesday will be the outcome of the US Federal Reserve’s two-day policy meeting.

“The world will be watching what Bernanke has to say about tapering. Since the last time he hinted a scaling back of easing‚ extreme volatility entered the market and global equities were heavily sold off‚” said Wibberley.

Central Bank chief Ben Bernanke is also expected to announce the Fed’s interest rate decision. The interest rate is expected to remain unchanged.

On the JSE‚ Sasol (SOL) added 1.59% to R440.04‚ while gold miners opened lower with AngloGold Ashanti (ANG) down 1.85% to R156.10 and Goldfields (GFI) losing 3.02% at R57.40.

Banks were all lower‚ with Standard Bank (SBK) falling 2.81% to R106.65‚ and Capitec (CPI) losing 2.59% to R188.98.

Pharmaceutical company Aspen extended gains Tuesday’s gains‚ climbing 2.10% to R197.31.

Asian markets were mixed on Wednesday‚ but a weaker Yen and strong gains on Wall Street lifted Japan’s Nikkei 1.83% higher at 13 245.22 points.


 
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