Johannesburg - The JSE lost further ground in the midday session on Monday led lower by resources and gold stocks tracking weaker global sentiment having seen Asia down, and resource heavy Australian markets decline.
A weaker euro also put pressure on commodities amid a firmer dollar, a trader noted.
At noon the JSE all share index was 0.87% lower, with resources down 1.25%, platinum miners shed 1.75% and gold miners dropped 2.09%. Banks and financials lost 0.98% and 0.65% respectively, while industrials were 0.58% lower.
The rand was bid at R7.56 to the dollar from R7.53 when the JSE closed on Friday. Gold was quoted at $1 083.57 a troy ounce from $1 078.68 at the JSE's last close, and platinum was at $1 519.50/oz, from $1 506.50/oz at the bourse's previous close.
"Resources and gold miners are leading the local bourse lower today," a local equities trader said. "Asia ended lower, and resource heavy Australia also weighed on the local market. Market sentiment is negative across the board, and some traders may be seeing this as a time to take profits."
"We are also seeing pressure on the euro amid continued problems in Greece, meaning a stronger dollar which puts pressure on commodities," the trader said.
'Appetite for risk has dwindled'
Dow Jones Newswires reports that European stock markets were lower on Monday as traders waited cautiously for the release of economic data to offer further clues to the strength of the global economic recovery following last week's decline in equities.
Now that a correction is unfolding, instead of looking at it as the long-awaited opportunity to add further market exposure, the overall sentiment today is that it is better to wait; that there is too much uncertainty and too many moving parts to consider, said Mislav Matejka, strategist at JP Morgan.
Friday's better-than-expected fourth-quarter US gross domestic product figures seemed to have repaired some of last week's damage, but the respite was short-lived, said Ian Williams, strategist at Altium Securities. "That underlines how investors' appetite for risk has dwindled in the last couple of weeks and, with the technical picture for the global indexes looking generally shaky, an immediate improvement looks unlikely," he said.
On Wall Street on Friday, stocks tumbled, capping their worst month since February 2009, as even the stronger-than-expected report on fourth-quarter economic growth and better-than-expected earnings from Microsoft failed to halt the recent slump.
Overall, the Dow Jones Industrial Average fell 0.5% to 10,067.33, its lowest close since November 6.
- I-Net Bridge