Johannesburg - The JSE opened in the red on Monday, tracking an 'uneventful' Asian market and on the back of a rally last week, according to a local trader.
By 09:11, the JSE all share index had given up 0.81%, with resources down 1.50%, having added more than 4% on Friday. Platinum receded 0.74% and gold miners shed 0.78%. Banks edged down 0.32%, financials were flat, down 0.10% and industrials
declined 0.33%.
The rand was last bid at R8.12 to the dollar from R8.05 when the JSE closed on Friday. Gold was quoted at $953.65/oz a troy ounce from $960.17/oz at the JSE's last close, and platinum was at $1 249.50/oz, from $1 259/ozat its previous close.
A local trader said: "We are slightly weaker this morning, following a strong rally last week. Asia is uneventful today and the US market was roughly flat on Friday.
"After last week's rally, we expect a pullback in the market this week, with trade on the quieter side," the trader said.
Dow Jones Newswires reports that European stocks are expected to open marginally lower on Monday, as investors take time to digest last week's strong gains amid signs the US economy, the world's largest, could be pulling out of its slump.
"With fewer fundamentals set for release in the coming days, traders really have a chance to try and determine whether the recent gains can be built upon," said Matt Buckland, a dealer at CMC Markets.
Buckland expected Europe's major indexes to slip at the open, with London's FTSE 100 index set to fall 14 points to 4424. He also saw Frankfurt's DAX index dropping 16 points to 5061, and the CAC-40 index in Paris down 21 points to 3318.
Oil rally loses steam
Still, resurgent concerns over the feasibility of the US toxic asset plan could end up weighing on the banking sector in the near term, added Buckland, while the strengthening dollar stands to erode commodity prices so with the finance, petrochemicals and miners sectors all poised to face some
challenges, progress could prove difficult to find in the near term.
US stocks finished Friday roughly where they began, but firmly higher for the week, after encouraging signs from the May jobs report.
For May, non-farm payrolls shed 345 000 workers, well below Wall Street's expectation for a decline of 525 000 jobs and the smallest monthly job loss since September.
The Dow Jones Industrial Average closed up 12.89 points, to
8763.13. For the week, the DJIA tacked on 262.8, with the index
closing within 0.2% of being in the green for 2009.
Asian trading has been mixed on Monday. The weaker yen has helped automotive and technology shares in Tokyo, with the Nikkei closing 1% higher. But South Korea's Kospi Composite index ended 0.1% lower, and the Hang Seng Composite index in Hong Kong was last seen 0.2% lower.
In the currency markets, the Asian session saw a slow start to the week. The euro has traded in a $1.3927-$1.4002 range and the US dollar in a ¥98.27-¥98.86 range.
Still, this represents a sharp bounce from early Friday levels on the non-farm payrolls data, and investors have now to decide whether this bounce is a sign of things to come, or just a bump in the road to a continued soft dollar.
At 06:00 GMT, the euro stood at $1.3972 and the dollar at ¥98.56.
Crude oil futures have edged lower on Monday, continuing the profit-taking action seen on Friday from seven-month highs, and hit by the strengthening dollar.
At 06:05 GMT, the July crude contract on Globex stood at $67.82 per barrel, down 62c, having settled Friday at $68.44 per barrel, just 37 lower, on the New York Mercantile Exchange.
Spot gold has also felt pressure from the strengthening dollar, and the short-term trend has now turned bearish, said Barclays Capital. At 06:05 GMT, gold stood at $955.85/oz, over $3 below the levels seen in New York late on Friday.
European government bond markets have opened slightly stronger, reflecting the expected weaker open on equity markets, and at 06:45 GMT, the June bund contract stood at 118.43, 0.09 higher.
- I-Net Bridge