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Johannesburg - Continuing negative sentiment on global markets is slowly pushing share prices on the JSE lower.
Although daily losses on the JSE are usually modest, the All-share index was lower on four of the five days this week and about 2% down for the week at mid-morning on Friday.
At that stage the All-share index had shed 0.60% at 51 623 points, its lowest since April 10 this year. The Top 40 index was 0.71% softer at 45 299 points.
All the other major indices, except the Gold index, were also down with the Resources index 1.21% softer, the Industrial index 0.55% weaker and the Financial index 016% lower. In earlier trade the Financial index shed more than 1%, but it recovered most of those losses.
The markets were waiting for the United States April payroll report due later in the day after jobless claims data raised doubts over the country's seemingly rosy employment picture. The data will not only give a good indication of the state of the world’s biggest economy, but also of what will happen to US interest rates.
After the Federal Reserve’s last meeting in April it was the general consensus that the bank would not raise rates at its next meeting in July, but since then some Fed officials have indicated that such a hike is still a possibility, which gave the dollar a new lease of life. An interest rate increase could lead to an outflow from emerging markets to the US.
There are fears that the latest payroll data could be a disappointment after the number of Americans filing for unemployment benefits rose more than expected last week, posting the biggest gain in more than a year.
Another report on Thursday showed a 35% surge in planned layoffs by US-based employers last month. The ADP National Employment Report showed US private employers added the fewest workers in three years in April.
Asian markets languished at a month low on Friday and European markets were also softer, after the S&P index on Wall Street reached a three-week low on Thursday. Asian markets have been under pressure since the beginning of the week after more negative news about the state of the Chinese economy.
Volumes were much lower in the JSE's financial sector on Friday after more than 21 million shares in Barclays Africa [JSE:BGA] were traded on Thursday, in reaction to news that Barclays Plc is selling a 12.2% stake in its African unit in a book building process to approved institutional investors.
Only 1.6 million shares in Barclays Africa changed hands on Friday but the share was the best performer among the big banks, gaining 1.49% to R135.56. FirstRand [JSE:FSR] was the busiest stock on Friday with more than 5 million shares traded, but it lost 0.98% to R42.27. Standard Bank [JSE:SBK] was 0.45% softer at R117.48.
Nedbank [JSE:NED], whose share price dropped sharply on Thursday on news that its West African subsidiary Ecobank suffered a loss in the first quarter this year, dropped back further on Friday. By mid-morning Nedbank was trading 0.87% lower. Old Mutual [JSE:OML], Nedbank’s holding company, lost 0.58% to R37.57.
The four big banks all dropped significantly over the past seven days. Standard Bank lost 10.24%, FirstRand 9.73%, Barclays Africa 8.5% and Nedbank 8.28%. The Financial index was 6.7% lower over that period.
In the industrial sector, Naspers [JSE:NPN] lost ground again and traded 0.33% softer at R1 927.48. The share price is now 11.5% lower over the past 30 days. Richemont [JSE:CFR] also lost 2.32% to R93.87 but SABMiller [JSE:SAB] gained 0.53% to R913.23.
In the resources sector Assore [JSE:ASR] traded at a new 52-week high of R218.85, despite the weaker iron ore price which dropped below $60 per ton on Thursday after measures by the Chinese authorities to prevent a price bubble in the commodity futures market. Kumba [JSE:KIO] was 0.28% lower at R108.70. Assore gained 15% over the past seven days but Kumba is 10.5% lower over the same period.
Among the big dual-listed resources shares Anglo American [JSE:AGL] was 2.65% softer at R138.46 and BHP Billiton [JSE:BIL] lost 1.53% to R178.65. BHP Billiton is more than 7% lower over the past seven days on concerns about commodity prices.
AngloGold Ashanti [JSE:ANG] also reached a 52-week low of R232.83 compared to the previous high of R230.80, after gaining 2.27%.
