Johannesburg - South African stocks ended deep in
the red on Tuesday weighed by resource counters amid profit taking
and risk aversion.
At 17:00 the JSE all share index had lost 1.37%. Resources shed 1.19%,
and platinum and gold producers weakened 0.43% and 0.16% respectively.
Banks gave up 1.80%, financials were down 1.38% and industrials weakened
1.56%.
The rand was bid at 7.85 to the dollar from 7.85 when the JSE closed on
Monday. Gold was quoted at $1 061.40 a troy ounce from $1 060.05 at the
JSE's last close, and platinum was at $1 333.50/oz, from $1 331/oz at
its previous close.
"There is profit taking, it was a negative day today. Risk aversion is
also coming back into the market," a trader said.
"The risk aversion supports the dollar which in turn puts commodity
prices under prices under pressure, and that is why our market is down so
much. The bigger weight of our market is down.
"The rand is weak. It's stronger than its lows, but it's still very,
very, weak and it's not even supporting these metals," he said.
"The Dow opened weaker and that is also weighing on our market. We are
just following what is happening overseas," he added.
Dow Jones Newswire reported that US stocks opened lower on Tuesday on
some economic jitters ahead of a two-day policy meeting from the Federal
Reserve, with traders looking past a decision by Warren Buffett's Berkshire
Hathaway to purchase Burlington Northern Santa Fe in a bet on economic
recovery.
Early on Tuesday, the Djia traded off 50 points to 9747. Within the
index, financials were particularly weak, including a decline of 1.4% for
Bank of America.
Setting off the drop for financials, Swiss banking giant UBS AG fell
more than 6% as it swung to a more than $500 million loss in the third
quarter on a variety of charges, and cautioned that heavy withdrawals from
wealthy clients will persist in coming months following a dismal performance
from its private bank.
While stocks climbed on Monday with the Dow Jones Industrial Average up
76 points to open the week, the move did little to dent a string of triple-
digit declines in the Djia last week. Better-than-expected data on
manufacturing and housing helped, though a string of other economic data
remains weighing over the market this week. For Tuesday, traders will be
keyed into US factory orders for September, due out at 10 a.m. EST.
In addition, the Federal Open Market Committee begins its two-day
meeting on Tuesday - traditionally no word comes from the Fed on the first
day. Given the fact moves in the dollar have regularly served as an
important tool for stock traders, there is heightened focus on the Fed's
statement expected on Wednesday.
When the JSE closed, the Djia was last off 0.27%.
- I-Net Bridge