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JSE slumps on investor fears

Johannesburg - The JSE sank on Thursday on the back of a combination of the strong rand, downbeat US economic data and resurfacing worries over the European sovereign debt crisis. Resources and gold counters slid more than 2%, thanks in part to the robust rand and a slight pullback in commodity prices.

The local currency, which rose against the pound and the dollar, hit dual-listed stocks and mining companies particularly hard, said Kevin Algeo, portfolio manager at Imara SP Reid.

By 17:00 local time, the JSE All Share [JSE:J203] index was down 1.37%, with gold miners sliding 2.29%, resources dropping 2.28% and platinum miners falling 0.97%. Banks also lost 1.02%, financials gave up 0.76% and industrials were down 0.88%.

The rand was last bid at 6.75 to the dollar from 6.76 at the JSE's close on Wednesday. Gold was quoted at US$1 526.68 a troy ounce from US$1 545.22/oz at the JSE's previous close, while platinum was at $1 812.70/oz, from $1 832/oz previously.

Algeo said the bad economic news from the US had not continued. On Wednesday, a poor ADP private sector job growth report and an Institute for Supply Management report showing the manufacturing sector slowing sharply in May raised fears over the US economic recovery.

Dow Jones Newswires reported that US stocks weaved between small gains and losses on Thursday morning as investors digested a round of mixed economic data.

The Dow Jones Industrial Average ticked down 18 points to 12 272 in morning trade.

The action follows a 280-point plunge in the blue-chip Dow on Wednesday. Stocks suffered their biggest decline since the middle of last year after a string of downbeat economic data spurred worries that the economic recovery had lost its footing.

US factory orders fell in April as demand for big-ticket items slipped. Earlier, initial unemployment claims came in slightly better than expected but overall levels were still elevated. In addition, applications remained high, a sign of stubborn weakness in the economy.

"The market is still worried about where the data is headed, [about] whether the economy is running out of steam," said Stephen J Carl, head equity trader at Williams Capital Group.

Greek sovereign debt fears came back to the fore.
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Rand - Dollar
18.98
-0.4%
Rand - Pound
23.99
-0.4%
Rand - Euro
20.52
-0.3%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.4%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,213.05
+0.8%
Silver
24.68
+0.2%
Brent Crude
86.09
-0.2%
Top 40
68,324
+1.0%
All Share
74,499
+0.8%
Resource 10
57,210
+2.8%
Industrial 25
103,820
+0.5%
Financial 15
16,514
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
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