Gold shares lose their shine

Johannesburg - The JSE Top-40 index of blue chips closed 0.91% lower to 23 655.66 points, while the All-share index fell 0.71% to 26 360.55 points.

The rand firmed to 7.64 to the dollar earlier after President Jacob Zuma said leftist allies of the ruling party did not determine economic policy.

By 17:40, it had erased all those gains and was trading at 7.80 against the dollar, 0.7% weaker than its previous close of 7.7450.

"We've seen the dollar strengthen, so it's tracking that. International markets have also struck lower," said a currency dealer in Johannesburg, adding the rand could weaken further as risk aversion was ticking up.

On the JSE, gold stocks were among the biggest losers. AngloGold Ashanti was down 3.68% to R289.90.

"We've seen some of the commodity prices coming down and that's pulling the commodities down," Abri du Plessis, Chief Investment Officer at Gryphon Asset Management said.

Harmony Gold dropped 2.85% to R78.50 as the bullion price drifted down to just above $1 040 per ounce, pushing the JSE gold mining index 2.8% lower.

Harmony swung into a loss per share of 12c in the September quarter, on a combination of rising wage and electricity costs and the firmer rand.

"Harmony disappointed on their results. I think that's making the market a bit shaky on the gold stocks," said du Plessis.

Platinum miners also dropped, with Lonmin falling 0.40% to R174.30.

Nedbank dropped 2.55% to R118.40 and Absa Bank was down 1.96% to R124.51.

- Reuters