Johannesburg - The worst single-day performance by the Dow Jones in two months had an immediate effect on the JSE on Tuesday morning as the local bourse backtracked by 362 points.
By 09:18, the JSE all share index had given up 1.65%, with banks leading the race downhill with a loss of 3.52%. Next worst was the gold index at - 2.71% and then financials at -2.44%. Platinums were down 1.77% and resources were off by 1.86%. The best performance of the day so far came from industrial companies, but they too were in the red by 1.09%.
The rand was last bid at R8.24 to the dollar from R8.17 when the JSE closed on Monday. Gold was quoted at $917.95/oz a troy ounce from $921.20/oz at the JSE's last close, and platinum was at $1 166.50/oz, from $1 175.50/oz at its previous close.
"We are off to a weak start on the back of the Dow being very negative," said senior dealer from Afrifocus, Neville Lahner.
He added that uncertainty still reigned over the Anglo and Xstrata buyout talk.
The catalyst for the move lower in equity markets on Monday was the World Bank confirming that it had downgraded global growth forecasts, said Ashley Davies at UBS. It now predicts the world economy will contract 2.9% in 2009 compared with earlier estimates of a 1.7% decline and forecasts growth to be at 2.0% next year down from the earlier estimate of 2.3%. South Africa is expected to recede by a full 1.5%.
Dow Jones Newswires reports this grim news resulted in US stocks on Monday posting their worst single-day loss in two months amid renewed concerns about the shakeout of the global financial crisis.
The Dow Jones Industrial Average slumped 200.72 points, to end at 8,339.01, the largest one-day selloff since April 20, adding to the nearly 3% plunge suffered by the blue-chip index last week.
- I-Net Bridge