Johannesburg - The JSE ended flat on Wednesday
held back by weaker US markets which opened lower on worse-than-expected
housing starts data, an equities trader said.
At 17:00 the JSE all share index was flat, down 0.13%, with resources
weakening 0.38%. Platinum producers were off 0.81% while gold miners were
flat, down 0.13%.
Banks were also flat, up 0.09%, financials eased 0.29%, while
industrials edged up 0.23%.
The rand was bid at 7.43 to the dollar, from 7.45 when the JSE closed on
Tuesday. Gold was quoted at $1 147.45 a troy ounce from $1 146.32/oz at
the JSE's last close, and platinum was at $1 455.50/oz, from $1 454/oz
at its previous close.
"We saw a flattish close. It was a volatile day. We saw our market stay
positive until the housing starts figures came out in the US. After that we
turned negative and then we moved positive a few minutes later," the trader
said.
"The market is not sure which way to go. It looks like the momentum is
going forward, all who missed the run now want to be part of it.
"The US has opened negative and that is on the back of the worse-than-
expected housing starts. That market is holding us back.
"The rand is still very strong moving in a narrow band. The gold price
is still very, very high, the dollar strengthened, but that didn't pull the
gold price down," he said.
Dow Jones Newswires reported that US stocks opened lower on Wednesday as
an unexpected decline in home construction and building permits in October
damped consumer companies.
Shortly after the open, the Dow Jones Industrial Average traded down 28
points, or 0.3%, to 10 409. Going into Wednesday, the index had risen in nine
of the past 10 sessions, closing at a new 2009 high on Tuesday. Leading the
move lower on Wednesday, however, Walt Disney fell 0.8%. The Standard &
Poor's 500 dropped 0.2% to 1108, led by a 0.5% decline for consumer
discretionaries. The Nasdaq Composite dropped 9 to 2 195.
Setting off the move lower, building permits in October fell 4% to a
552 000 annual rate. Economists had expected permits to rise by 0.9% to a
rate of 580 000. Building permits are a sign of future construction, with a
monthly declining hinting at a still weak consumer going into the holiday
season.
With the decline in construction data, traders shrugged off a Labour
Department report that showed US consumer prices continued to rise at a
moderate pace in October, indicating a slow economic recovery is keeping
inflation contained. Given commodities prices have gained steadily in recent
weeks, including a move higher to start Wednesday's session, the data wasn't
able to stave off recent concerns about inflation. Notably, commodities are
often bought by investors during periods of high inflation.
"This possible downturn in the (construction) numbers doesn't surprise
me," said Andrew Neale, portfolio manager wealth-management and advisory
firm Fogel Neale Partners. "It's going to be very difficult to persuade
homeowners to buy new homes when you've got such discounted existing
inventory."
To go along with the rise in commodities prices on Wednesday, oil
futures recently traded up 54 cents to $79.68 a barrel, the dollar fell
against both the euro and the yen in early trading.
When the local market closed, the Djia had weakened 0.61%.
- I-Net Bridge