Johannesburg - The JSE extended its losses on Tuesday morning‚ led down by gold miners‚ while retailers provided some support.
This follows on a global sell-off on Monday‚ triggered by uncertainty over US Federal Reserve monetary tapering and Chinese growth concerns.
At 10:03‚ the All Share [JSE:J203] index was down 0.19% at 38 003.35 points. The gold index fell 3.52% on a softer gold price and stronger rand.
Retailers gained the most‚ up 1.14% after the rand strengthened to R9.97/$ in the morning from Monday’s close of R10.06/$.
European markets were firmer‚ with London’s FTSE 100 up 0.62% at 9:48‚ while in the East‚ the Hong Kong Hang Seng index ticked up 0.74% and the Japanese Nikkei 225 dipped 0.72%.
“The gold price is under pressure and the rand strengthened below R10/$. This combination of has put gold stocks under pressure. Gold stocks have taken a pounding over the last couple of months‚” said Hennie Fourie‚ a trader as PSG Konsult.
“Retailers also took a pounding over the last couple of days due to a weaker rand‚ but with the strengthening of the rand‚ retailers and banks are showing upside today‚” he said.
Rand Merchant Bank said in a note that event risk was high on Tuesday due to the expected release of US durable goods‚ house price‚ consumer confidence and house sales figures later in the day.
“Global pressures have eased somewhat. US equities fell sharply‚ but managed to claw back some losses before the close. Dollar gains have halted. Asian shares are still suffering‚ but this is because they are playing some catch-up to the US and because of ongoing worries over China‚” the bank said.
“Fed policy makers have tried to calm conditions‚ reaffirming that tapering implies neither tightening nor an early beginning of rate hikes. Implicitly‚ and sometimes explicitly‚ the policy makers are saying that the markets have overreacted‚” RMB said.
“It is not clear yet if the market’s ‘taper tantrum’ has reached an end. Probably a lot will come down to the data‚ hence the expectation of volatility this afternoon‚” it said.
On the JSE‚ gold miners AngloGold Ashanti (ANG) shed 4.38% to R139‚ Gold Fields (GFI) slumped 3.04% to R50.15‚ and Harmony (HAR) gave back 2.92% to R33.20‚ after plunging more than 8% on Monday.
Platinum miner Lonmin (LON) gained 1.48% to R41.03 after shedding more than 5% on Monday.
Retailers Truworths (TRU) was up 1.65% at R80.32 and the Foschini Group (TFG) gained 1.77% to R93.65.