Platinum stocks lead JSE lower

Johannesburg - The JSE edged further into negative territory on Monday morning‚ led down the most by platinum counters.

Broad-based selling is being seen across the JSE‚ continuing on last week’s global sell-off and turbulent trading week that was triggered by US Federal Reserve chairman Ben Bernanke’s announcement of a possible tapering off of quantitative easing later in the year.

The JSE All Share [JSE:J203] index was trading 0.55% softer at 38 800.72 points at 9:41‚ with the platinum index down 1.28%.

Banks and retailers also showed losses‚ dipping 0.90% and 0.81% respectively.

The gold index was 0.46% softer as bullion continued its downward slide‚ down 1.25% with spot gold quoted at $1 283.40/$ at 9:41‚ amid a stronger US dollar environment.

Further afield‚ Australia’s share market dived on Monday as Shanghai led a regional sell-off amid ongoing concern that a credit squeeze in China could exacerbate a slowdown in the world’s second-biggest economy at the same time that global markets were adjusting for the prospect of reduced monetary stimulus from the Fed‚ Dow Jones Newswires reported.

The benchmark S&P/ASX 200 closed 1.5% down at 4.669‚1 points‚ its worst finish in six months. China’s Shanghai Composite ended sharply lower‚ falling 5.3%.

Traders are increasingly concerned that the expected reduction in Fed stimulus will exacerbate a credit squeeze in Asia as China attempts to rein in excessive property speculation‚ the newswire reported.

Rand Merchant Bank (RMB) said in a morning note the fallout from the Fed would presumably remain the major driver of markets this week‚ so attention will be on US data as well as the various speeches by Fed officials. “Comments will reflect individual biases but the general tone will presumably reflect a desire to calm markets down‚” the bank said.

“The week ahead is fairly busy on the local data front. The South African Reserve Bank’s leading indicator is scheduled for release tomorrow morning.

"Year-on-year growth should have been aided by a low base‚ but we think the quarterly momentum slowed notably in April‚” RMB said.

“The May PPI figures‚ due on Thursday‚ should show a further moderation in producer price inflation. We expect a moderation in credit growth‚ but a tick up in money supply growth. The market will probably focus on the May trade and budget numbers.

"We are more optimistic than consensus on the extent of the narrowing in the monthly trade deficit and expect a sharp reduction in the monthly budget balance given that the terrible April data had more to do with the lack of spending last year than this year’s fiscal dynamics‚” the bank said.

Among individual share on the JSE‚ platinum counters Lonmin (LON) dipped 1.8% to R42.15‚ Impala Platinum (IMP) was down 1.52% at R93.25 and Northam Platinum (NHM) dipped 1.43% to R33.81.

Standard Bank (SBK) was off 1.14% at R106.18 and retailer Spar (SPP) gave back 2.22% to R113.43.

Gold counters Harmony (HAR) slid 5.15% to R35.38‚ Gold One International (GDO) tumbled 13.33% to R1.30 and Sibanye (SGL) gave back 5% to R7.60.