Softer world markets drag down JSE

2012-11-09 17:53

Johannesburg - The JSE closed in negative territory on Friday albeit off its intra-day lows‚ as the bourse followed world markets lower amid lingering fiscal cliff - tax increases and spending cuts - concerns and worries about how the US Congress will tackle this problem.

At 17:00‚ the JSE All Share [JSE:J203] index was down 0.66% to 37 344.40 points‚ with the top-40 index losing 0.85%. The gold sector was the only index showing some upside‚ adding 1.04% on the day‚ while the platinum sector was the worst performer‚ dropping 3.06%.

Lonmin weighed on the platinum index after announcing that it has made losses in the year ended September‚ delivering an operating loss of $702m from a $307m operating profit the year before‚ due to strikes.

“There is volatility in the local market‚ but pockets of strength can be seen among defensive stocks such as Remgro and Imperial‚” said Ferdi Heyneke‚ portfolio manager at Afrifocus.

“The platinum index is lower because of continued negative sentiment due to the strikes‚ although the platinum price is holding up fairly steady.

"Lonmin has lost value due to its rights issue‚ while Impala has had a good recovery in the last while‚ but has turned around again due to some profit taking‚” he said.

“The gold price has edged up‚ helping the index higher‚ and investors are seeing value in gold counters at these levels‚ with gold stocks that have been down for quite a long time‚” he said.

Major European bourses were trading in negative territory on Friday afternoon due to continued Greek and Spanish economic woes‚ with London’s FTSE 100 trading 0.41% softer at 5.752 point at 17:00 local time.

US stocks edged lower again on Friday after a steep two-day slide‚ as investors were spooked by Greece’s financial crisis and potential fiscal tightening measures in the US‚ Dow Jones Newswires reported.

At 17:00 local time the Dow Jones Industrial Average dipped 0.19 to 12 786 points.

The Dow has lost 3.3%‚ over the last two sessions‚ the biggest two-day decline in a year. Investors have been fretting about the looming fiscal cliff and its mix of tax increases and spending cuts if a budget deal is not reached by year end.

Later on Friday‚ US President Barack Obama will call on Congress to take steps to help the economy and address the so-called cliff in his first public statements at the White House since winning re-election on Tuesday.

Among local counters‚ Anglo American closed 1.95% lower at R258.50 an its rival BHP Billiton dropped 1.22% to R270.81.

Among platinum counters, Lonmin fell as much as 6% on Friday but closed 3.2% lower at R62.15 after announcing a $702m operating loss in the year to September.

Impala shed 3.77% to close at R62.15 and Northam Platinum was down 2.74% at R32.00.

Among gold counters AngloGold Ashanti added 2.44% to R296.00 and GoldFields dipped 0.60% to R110.95.

Swiss-based luxury good group Richemont closed 1.6% lower at R58.42‚ after it reported a 21% rise in sales to €5.106bn‚ or a rise of 12% at constant exchange rates for the six months to September‚ from the same period a year ago on Friday.