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Johannesburg - The All-share index on the JSE was flirting briefly with its all-time high on Tuesday morning, before the market succumbed to a whole slew of bad news affecting markets worldwide.
After spiking sharply on Monday morning to above 52 200, just below the previous high, the tide turned and the All-share index went into a gradual but modest descent.
Markets worldwide are down on real concerns about the situation in Greece, where the government is on a collision course which could mean the end of the eurozone as it is known today because if Greece is forced to leave the European Union, other financially vulnerable countries may have to follow.
Wall Street was under pressure on Monday night because of the problems with Greece, and the Asian and European markets followed suit on Tuesday morning.
READ: US stocks drop on Greek default fears
The local market was also waiting for the latest local employment statistics and manufacturing data, with the general perception that the numbers would disappoint.
By midday on Tuesday the All-share index was only 0.20% lower at 52 000 points, and the Top 40-index was also 0.20% softer at 45 784 points.
The resources stocks were the heaviest hit, with the Gold index 0.9% lower and the Resources index 1.15% weaker. Results published by resources companies on Monday give a clear picture of how severely local mining companies were affected by last year’s prolonged strikes and the sharp drop in commodity prices.
READ: Amplats Q4 production dips 17% on strike
Two of the local subsidiaries of Anglo American [JSE:AGL] announced sharp drops in earnings. Anglo American Platinum’s [JSE:AMS] earnings were almost halved by the prolonged strike in the platinum sector last year, and Kumba Iron Ore [JSE:KIO] announced a 29% fall in earnings due to a slide of more than 50% in iron prices.
Anglo’s share price was however only 0.40% lower by midday on Tuesday at R204.17, indicating that investors have discounted the bad news already.
Amplats dropped 1.45% to R347.43 after the company announced on Monday that its headline earnings practically halved to R786m off the back of the unprecedented five-month strike. Operating profit was R1.1bn lower than in 2013, ending the full year at R843m.
The CEO Chris Griffith however painted a positive picture of the company’s progress in recovering production and the prospects for the platinum market.
Kumba lost 3.05% to R229.76 on the news that headline earnings dropped 29% despite a rise of 10% in production, due to lower iron prices. The company said it would cut production costs, capital expenditure and staff to cope with expected lower prices this year.
The share price of Harmony [JSE:HAR] dropped 2.19% to R31.23 after the headline loss widened from R71m in the previous six months to R763m for the six months ending December 31.
The company’s share price has jumped by 48% over the last 30 days on perceptions that the company’s restructuring is going well and that the prefeasibility studies of its Golpu projects have shown more value than previously expected.
Sibanye Gold [JSE:SGL], which reached an all-time high last month of R31.23, was 0.10% higher at R30.65 on news that production at its Beatrix mine has started again after an agreement with unions. Earlier violence between the Association of Mining and Construction Union and the National Union of Mineworkers forced the company to close shafts.
