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Resource pounding sends JSE lower

Johannesburg - The JSE closed the first quarter on the back foot with resource counters taking a pounding as investors got out of riskier cyclicals and sat on the sidelines ahead of a US Federal Reserve policy statement on Wednesday and a European Central Bank announcement on Thursday‚ that will give further market direction.

Financial and banking indices managed a bit of upside in late trade on Tuesday.

At 17:00 on Tuesday‚ the JSE All Share [JSE:J203] index ended down 0.74% at 38‚735 points‚ with the top 40 blue-chip index ending 0.86% softer at 34 068.00 points.

The platinum and resources indices shed 4.02% and 2.77% respectively. Gold miners continued their downward bias‚ ending 2.77% weaker on a lower gold price‚ quoted 0.62% softer at $1 465.41 per ounce at 5pm local time.

“World markets are holding up relatively well‚ but we ended lower due to resources taking a pounding today. Commodities prices were down but not as much‚ so it is very strange that resources were down by so much. I cannot see any specific reason for the selloff‚” said Hennie Fourie‚ trader at PSG Konsult in Pretoria.

“Investors do not want any risk and are moving out of cyclicals and are sitting on the sidelines‚” he said.

European stock markets were mixed with London’s FTSE 100 seen trading 0.53% softer at 4.48pm local time. Strong earnings results in Europe were offset by a record rise in eurozone unemployment as the March unemployment rate for the eurozone rose to 12.1% from February's 12%‚ the highest since record-keeping for the region began in 1995‚ Dow Jones Newswires reported.

Meanwhile‚ across the Atlantic‚ US stocks opened lower on Tuesday as investors weighed disappointing results from blue-chip drug maker Pfizer and weak European employment data.

At 16:48 local time the Dow Jones Industrial Average was 0.31% weaker at 14 772.98 points.

The pullback comes on the last day of a month that is set to be the fifth straight month of gains for the blue-chip Dow‚ Dow Jones Newswires reported.

The move came after the Chicago-area purchasing managers’ index for April fell to 49.0‚ well below expectations for a rise to 52.8 from March's 52.4. Meanwhile‚ the Conference Board's consumer-confidence index is projected to rise to 62 from 59.7 in March.

Pfizer was the biggest decliner among the Dow industrials‚ dropping 3% after the drug maker missed first-quarter earnings and revenue estimates and cut its 2013 outlook.

John Sawyer‚ chief investment officer for BBVA Compass‚ said investors have little incentive to push the market in either direction ahead of the Federal Reserve's policy statement Wednesday‚ the European Central Bank's announcement Thursday and key US labour market data due out Friday.

In US economic headlines‚ the employment-cost index for the first quarter rose 0.3% from the fourth quarter‚ less than expected‚ while the S&P Case-Shiller 20-City home-price index for February rose 9.3% compared to the same period a year earlier‚ higher than expected.

Meanwhile‚ the US-listed shares of some big European companies rallied after reporting better-than-expected profits. UBS rallied 7%‚ Deutsche Bank climbed 5.7% and BP rose 2.3%.

Among individual shares on the JSE‚ Anglo American (AGL) gave up 2.60% to R217.75 and rival BHP Billiton (BIL) ended 2.10% lower at R249.00.

Exxaro (EXX) shed 4.21% to R140.73‚ while ArcelMittal (ACL) added 1.64% to R22.99 and Merafe (MRF) accelerated 5.56% to 76c.

Platinum counter Lonmin (LON) tumbled 7.48% to R37.00 after it said on Tuesday it has experienced an incident at its Number Two furnace‚ which has resulted in the furnace being shut down. No one was injured.

The incident has happened at a time when Lonmin had just shut down the Number One furnace for its planned upgrade of the hearth and shell‚ the company said.

Impala Platinum (IMP) shed 4.22% to R122.46‚ while Aquarius (AQP) surged 7.91% to R6.00 after the company reported that for the quarter ended March‚ attributable production from operating mines increased by 20%.

Anglo American Platinum (AMS) ended 1.60% lower at R339.00 after it said the consultation process between itself and the Department of Mineral Resources regarding the company’s restructuring proposals was in the final stages and that the outcome will be communicated from next week. Amplats and the department has been involved in the consultation process aimed at averting up to 14‚000 job cuts at the world’s number one platinum producer as part of its restructuring drive.

Amongst gold stocks‚ AngloGold Ashanti (ANG) ended 1.48% lower at R167.40‚ while Gold Fields (GFI) lost 4.07% to R63.87 and Sibanye (SGL) lost 7.10% to R8.50.

Gold One International (GDO) bucked the trend‚ ending 0.48% firmer at R2.10 after the company reported that a total of 61‚853 ounces of gold was produced for the quarter to March‚ marginally lower than forecasted. Gold One reported revenue of $95.79m‚ its highest quarterly revenue ever recorded‚ the company said.

Commodity trading and investment company Metmar (MML) slid 3.13% to R1.55 after reporting a headline loss per share from continuing operations of 32.4c in the year to February from a headline profit 34.1c profit in the similar period a year ago.




 
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Rand - Dollar
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23.91
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Rand - Euro
20.43
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Rand - Aus dollar
12.34
+0.1%
Rand - Yen
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910.50
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