JSE slides on dollar strength

Johannesburg - The JSE opened sharply lower across the board on Thursday, with softer commodity prices putting pressure on resources counters. A lack of risk appetite also weighed on sentiments.

A trader said the stronger dollar, which coincided with weakening commodities, saw equities around the world drop in tandem. The market is expected to focus on US jobless claims data and PPI figures due out later today.

By 09:20 local time, the JSE All Share [JSE:J203] index fell 0.94%, with gold miners dropping 1.05%, resources easing 1.50% and platinum miners shedding 1.33%. Banks slid 1.05%, financials were down 0.84% and industrials gave up 0.49%.

The rand was bid at R6.88 to the dollar from R6.80 at the JSE's close on Wednesday. Gold was quoted at $1 494.82 a troy ounce from $1 509.20/oz at the JSE's previous close, while platinum was at $1 766/oz, from $1 784.50/oz previously.

RMB's currency strategists, John Cairns and Nema Ramkhelawan, said commodities and global equities prices were in flux as a stronger dollar and the unwinding of speculative positions dragged on prices.

"The rand and its compatriot commodity currencies, which proved resilient to geopolitical tensions in the Middle East, have conceded gains in the face of waning risk appetite and lacklustre global data releases," they said.

Dow Jones Newswires reported that Asian shares were down on Thursday as a tumble in energy markets on Wednesday spooked investors, while selling in the Sydney market was exacerbated by disappointing jobs data that hammered the Australian dollar.

Australia's S&P/ASX 200 dropped 1.2%, Japan's Nikkei Stock Average was down 0.7%, South Korea's Kospi Composite fell 1.3%, Hong Kong's Hang Seng Index slipped 0.8% and China's Shanghai Composite fell 0.4%.

Dow Jones Industrial Average futures were down one point in screen trade.

Energy prices tumbled on Wednesday as a plunge in gasoline futures triggered a five-minute trading halt on Nymex for the first time in two years and dragged June crude oil futures down $5.67 or 5.5% to $98.21 per barrel. It was recently up US$1.38 at $99.57 per barrel on Globex. The sell-off in energy markets hit other asset classes on Wednesday, with the S&P 500 dropping 1.1% and weighing on the euro while boosting treasuries.

The Greek debt crisis also weighed on sentiment, although the euro managed to recover slightly in Asian trade along with crude oil in what appeared to be a consolidation from a volatile Wednesday.