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JSE in the doldrums on China, Japan

Aug 11 2010 13:17

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Johannesburg - The JSE remained weaker at noon on Wednesday, taking strain after global markets edged down on the back of
disappointing economic data from China and Japan.

By 12:09 local time the JSE all share index had declined 0.48%. Gold miners rose 1.55%, but resources edged down 0.85% and platinum miners fell 0.46%. Banks added 0.30%, but financials lost 0.08%, and industrials weakened 0.30%.

The rand was bid at R7.28 to the dollar from R7.21 at the JSE's close on Tuesday. Gold was quoted at $1 196.52 a troy ounce from $1 194.74/oz at the JSE's previous close, while platinum was at $1 537.50/oz from $1 540.50/oz before.

A trader said the local market maintained some weakness, as negative news from Japan and China weighed on sentiment. 

"There is nothing to put the spark on the market as investors did not react much to the Fed statement yesterday," the trader said

The US Federal Reserve announced new plans on Tuesday to support the slowing US economy.

Kevin Algeo, portfolio manager at Imara S P Reid, said the local market opened lower as China dampened sentiment after reporting economic data indicating that the economy is not growing as quickly as anticipated.

"The big question regarding China is: is it heading for a soft landing or a hard landing," Algeo said.

Dow Jones Newswires reported that Asian stock markets were mostly lower on Wednesday as concerns over the health of US economy weighed on sentiment with exporters falling in Japan.

A raft of data from China also showed that country's economy was cooling; however, Chinese property shares rebounded as July inflation came in mostly in line with expectations, helping ease worries over further potential monetary policy tightening.

The Federal Reserve's acknowledgement that the US economic recovery was slowing and its decision to reinvest proceeds from expiring mortgage-backed securities into long-term Treasurys to help keep mortgage rates low held little cheer for the market.

Japan's Nikkei Stock Average closed 2.70% lower, and Hong Kong's Hang Seng Index finished 0.83% weaker.

European stock markets pushed lower on Wednesday, with market participants showing a degree of caution after the Federal Reserve on Tuesday downgraded its outlook for the health of the world's largest economy.

  - I-Net Bridge

 

 
 
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