Johannesburg - The JSE slid in the opening session on Thursday‚ reflecting the bearish sentiment on global equity markets after the US central bank said it was likely to curb its stimulus measures later in the year if the country’s economic outlook improved sufficiently.
At 9:41‚ the All Share [JSE:J203] index was down 1.74% to 40 074.54 points‚ with the blue-chip Top 40 - (Tradeable) [JSE:J200] index losing 1.84% to 35 722.10 points. Gold and bank indices shed 2.49% and 2.16% respectively‚ while resources gave up 1.86%.
“It is ironic that confirmation of a better economy should hit the stock market‚ because a better economy means better company earnings‚ but it is a case of investors getting used to a potential reduction in bond-buying by the Fed and therefore higher bond yields‚” said Paul Hansen‚ a portfolio manager at Stanlib Wealth Management.
The US Federal Reserve Chairman Ben Bernanke said on Wednesday night that his committee saw the downside risks to the outlook for the economy and the labour market as having diminished since the US’s autumn‚ adding that inflation over the medium term was anticipated to be at or below its 2% target.
Leading European markets were weaker in early trade‚ as were their Asian counterparts.
London’s FTSE 100 index lost 1.19 while Hong Kong’s Hang Seng dropped 2.58%.
Among individual shares on the JSE‚ BHP Billiton (BIL) was down 2.44% to R276.04 and Amplats (AMS) retreated 2.09% to R303.56.
Gold Fields (GFI) was down 4.03% to R55.44 and ArcelorMittal SA (ACL) lost 3.22% to R30.39.
FirstRand (FSR) was down 3.08% to R27.36 and Sanlam (SLM) dropped 3.73% to R43.32.