JSE weaker amid volatile trade

2011-07-15 10:11

Johannesburg - The JSE was soft at its opening on Friday, in line with global sentiment as volatility continued to plague markets amid persistent conflicting data, with more on the cards throughout the course of the day.

By 09:11 local time, the JSE All Share [JSE:J203] index lost 0.21%, with gold miners off 0.23% and resources down 0.49%. Platinum miners lost 0.10%.

Industrials were a tad off, by 0.03%. Banks fell 0.19% and financials dropped 0.08%.

The rand was bid at R6.91 to the dollar, from R6.85 the JSE's close on Tuesday. Gold was quoted at $1 579.76 a troy ounce from $1 583.65/oz at the JSE's previous close, while platinum was at $1 752/oz, from $1 767/oz previously.

A local trader said that it was difficult to determine which way markets would turn next amid a stream of conflicting data.

"The JSE has run quite hard of late, and on percentage terms has performed better than most markets under very difficult circumstances, including local political issues with the current strikes," she said, noting some profit-taking in the local market.

Dow Jones Newswires reported that regional markets in Asia were mixed as caution prevailed amid another ratings agency warning on US government debt and ahead of the results of euro-zone bank stress tests.

Late on Thursday, Standard & Poor's placed its US "AAA" long-term and "A-1" short-term sovereign credit ratings on CreditWatch with negative implications following Moody's Investors Service's move on Wednesday to put US debt on watch for a possible downgrade.

The Nikkei closed 0.4% firmer, the Hang Seng Index was down 0.46%, the Kospi gained 0.7%, the Taiex was up 1.1%, and the Shanghai Composite is added 0.2%.

European stocks are set to open lower on Friday, as another warning by a ratings agency on US government debt, together with US Federal Reserve chairman Ben Bernanke deflating expectations of additional monetary stimulus, damp sentiment.

Adding to worries about the US economy, Bernanke deflated additional monetary stimulus hopes by telling legislators that the Fed was not making any new bond-buying proposals. Those hopes arose on Wednesday when Bernanke appeared to leave the door open to more policy actions as he spoke before Congress. The second round of quantitative easing concluded at the end of June.

Later in the day, the results of the European Bank stress tests are expected to be released at about 16:00 GMT.

In the US, consumer prices inflation for June is expected at 14:30, together with the Empire State manufacturing reading. Industrial production data follows at 15:15, with the University of Michigan confidence survey soon after at 15:55. On the corporate agenda, second-quarter earnings from Citigroup would be under the spotlight after Thursday's estimate-beating earnings from JPMorgan Chase.

On the JSE, Anglo American [JSE:AGL] lost 47 cents to R332.03, BHP Billiton [JSE:BIL] fell R2.78 or 1.06% to R260.70, and Sasol [JSE:SOL] fell R2.29 to R354.21.

Retailer Truworths International [JSE:TRU] waivered R1.30 or 1.79% to R71.20.

Sugar group Tongaat Hulett [JSE:TON] added R1.50 or 1.62% to R94.