Johannesburg - Mining counters led the falls and
pushed the JSE to close 391 points weaker on Tuesday amid risk aversion on
the back of a stronger dollar.
At 17:00 the JSE all share index had lost 1.45%, with resources losing
2.28%, platinum counters shedding 2.70% and gold miners falling 3.08%.
Banks were flat, up 0.16%, financials slipped 0.35% and industrials
weakened 1.11%.
The rand was bid at 7.65 to the dollar from 7.53 just before the JSE
closed on Monday. Gold was quoted at $1 036.65 a troy ounce from
$1 054.42/oz just before the JSE's last close, and platinum was at
$1 319.50/oz, from $1 328/oz at its previous close.
"We ended deep in the red. We saw that after our market closed yesterday
the US markets lost momentum," a trader said.
"We lost further ground when the US opened and that is on the back of
consumer confidence data which decreased unexpectedly.
"The rand has weakened quite a lot. There is risk aversion in the
markets and the dollar is stronger, putting pressure on the commodity
prices," he said.
"The weak rand is not even helping these mining stocks and they are
leading us lower," he added.
Dow Jones Newswire reports that a double helping of weak data on
consumers and manufacturing pushed most stocks lower on Tuesday morning.
Stocks had opened to the upside as a pickup in home prices in August
helped jolt a rebound from two straight triple-digit losses for the Djia.
But in recent activity, two late morning reports weighed on trading.
First, the Conference Board said US consumers turned decidedly more
pessimistic in October, with households increasingly worried about job
prospects. The Conference Board, a private research group, said its index of
consumer confidence fell to 47.7 this month, from a revised 53.4 in
September, which was originally reported as 53.1. The current month's
reading was well below economists' projection of 53.2, according to a survey
conducted by Dow Jones Newswires.
In a second report, the manufacturing index from the Richmond branch of
the Federal Reserve hit a reading of 7 for October, down from 14 in
September.
After reaching higher by more than 50 points, the Dow recently rose 7
points, or 0.1%, to 9874. The Standard & Poor's 500 declined 2 to 1 065.
The technology-heavy Nasdaq Composite slid 11 to 2 131.
Tuesday morning's action follows two consecutive days in the red for
stocks, which amounted to the Dow's first set of back-to-back triple-digit
declines since June. The slump came on scepticism about a rally that has
lasted seven months and pushed the Dow to its highest point of the year last
week. The majority of the recent gains have been driven by a wave of better-
than-expected quarterly reports, as even with the two-day slide, the Dow is
still up roughly 150 points from where it began earnings season with Alcoa's
quarterly report.
"The third-quarter earnings have been very good where you're seeing
beats not just on the bottom line but also the top line," said Joe Ransom,
portfolio manager of the RidgeWorth Select Large Cap Growth Fund. "But even
in the best of times, the picture is always mixed."
The Djia had last collected 0.45%.
- I-Net Bridge