Johannesburg - South African stocks ended lower on Monday shrugging off a positive Dow Futures and European markets, feeding on negative sentiment instead, according to a local equities trader.
By 17:00 the JSE all share index was 0.71% lower, with resources down 1.24%, platinum miners shed 3.61% and gold miners dropped 0.63%. Banks and financials lost 1.03% and 0.58% respectively, while industrials were 0.22% lower.
The rand was bid at R7.55 to the dollar from R7.53 when the JSE closed on Friday. Gold was quoted at $1 087.89 a troy ounce from $1 078.68 at the JSE's last close, and platinum was at $1 523.50/oz, from $1 506.50/oz at the bourse's previous close.
A local equities dealer said: "I am at a loss for words at the moment, Europe and Dow Futures are both positive, yet the local bourse opened lower and drifted further during the course of the day.
"The rand is the same, and commodity prices have if anything ticked up slightly. I can only assume that the local market is sentiment driven, with buyers reluctant to step in despite lower prices," he said.
Dow Jones Newswires reports that US stocks climbed early on Monday, as rising oil prices and better-than-expected earnings from Exxon boosted energy companies and data showed a larger-than-anticipated rise in personal income.
Obama's budget proposal
The Dow Jones Industrial Average was up 47 points, or 0.5%, at 10117, in early trading.
The market's opening climb followed a heavy slump last week, with the Dow closing out January down 3.5%, snapping a string of six straight monthly gains. The rebound in the stock market comes ahead of President Barack Obama's budget proposal. Obama will propose a $3.8 trillion budget for fiscal 2011 that projects the deficit will shoot up to a record $1.6 trillion this year, but would push the red ink down to about $700bn, or 4% of the gross domestic product by 2013.
A $1.2 trillion reduction in the deficit over 10 years would come largely through a proposed fee on big banks, the elimination of tax preferences for oil, gas and coal companies, a three-year freeze on non-security discretionary spending, and the expiration of Bush-era tax cuts for wealthier households.
Earlier on Monday, the Commerce Department reported that personal income rose by more than expected, climbing 0.4% in December, while personal spending rose by 0.2%, less than economists had predicted.
In addition, a key price gauge showed prices rose 1.5% in December compared to December 2008. The core price index for personal consumption expenditures, which excludes volatile food and energy, was up 0.1% in December compared to the prior month.
- I-Net Bridge