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Johannesburg - The JSE was weaker in the midday session on
Thursday, with resources weighing negatively on the overall market. Volumes
remained thin.
The pullback was driven mainly by risk aversion, which saw
foreign investors sell local equities, said Jonathan Fisher, regional director
at PSG Konsult. This foreign selling prompted the rand to weaken.
By 12:01 local time, the JSE All Share [JSE:J203] index was down 0.46%, with resources falling 1.00%, gold miners dropping 0.09% and platinum counters shedding 0.22%. Banks lost 0.72% and financials eased 0.38%. But industrials were flat.
The rand was bid at R6.82 to the dollar from R6.75 at the JSE's close on Wednesday. Gold was quoted at $1 456.04 a troy ounce from $1 460.39/oz at the JSE's previous close, while platinum was at $1 777.50/oz, from $1 783.50/oz previously.
Fisher said fragile global equities also dragged the local market lower.
Dow Jones Newswires reported that European stocks were
negative on Thursday, led lower by a slump in the banks sector after Spanish
lender Bankinter SA reported a 26% decline in first-quarter net profit.
The Stoxx Europe 600 banks sector fell, last seen down 1.1% at
203.30, following Bankinter's results and also on a note by UniCredit regarding
the Spanish banking sector. UniCredit downgraded Banco Santander, while cutting
earnings-per-share estimates by 12% on average for Spanish-listed banks. Banco
Santander fell 1.5%, while Bankinter fell 2.6%.
In addition, traders suggested JPMorgan Chase's
first-quarter results were still being digested by the market and were not as
positive as first thought.
Societe Generale said: "Aside from the performance in the investment banking segment, we do not think the results were nearly as strong as the headlines would indicate." It warned that read-through from the company's earnings suggest mortgage-centric US names such as Bank of America and Wells Fargo could see some pressure from expected weakness in their mortgage operations.
By 08:00 GMT, the Stoxx Europe 600 index was down 0.3% at
277.50, though off lows. London's FTSE 100 was down 0.5% at 5 978.89,
Frankfurt's DAX slipped 0.2% at 7 161.98 and Paris's CAC-40 declined 0.5% at 3
985.22.
Basic resources stocks also weighed heavily following a fall in metal prices. The Stoxx Europe 600 basic resources index fell 1.0% to 203.55 as commodity prices, notably copper, fell.
