JSE slips as commodities weigh

The JSE fell sharply as the pullback in commodity prices put pressure on mining stocks, adding to losses in the broader market.

|||

The JSE fell sharply on Wednesday as the pullback in commodity prices put pressure on mining stocks, adding to losses in the broader market.

The dollar was weaker, but commodities had not held up, said Kevin Algeo, portfolio manager at Imara SP Reid. When the greenback drops, commodity prices tend to rise.

By 17:00 local time, the JSE all-share index added 1.45%, with gold miners dropping 2.63%, resources falling 2.02% and platinum miners sliding 3.07%. Banks shed 1.63%, industrials eased 1.08% and financials fell 1.14%.

The rand was bid at 6.63 to the dollar from 6.61 at the JSE's close on Tuesday. Gold was quoted at US$1,525.51 a troy ounce from US$1,544.64/oz at the JSE's previous close, while platinum was at $1,823.50/oz, from $1,864.00/oz previously.

Algeo said investors were reducing their exposure to commodities given fears over inflation, a slowdown in growth, indications of interest rate hikes and persistent worries about the European debt crisis.

Dow Jones Newswires reported that US stocks slipped on Wednesday, pressured by disappointing economic data, weaker commodity prices and a lacklustre crop of earnings reports.

The Dow Jones Industrial Average fell 103 points, or 0.8%, to 12,702 in early trading.

After surging in April, stocks have slipped the first two days of the month and extended those losses in morning trading on Wednesday. Prior to this month, the S&P 500 had only declined on the first two trading days of the month three times since April 2009, according to Bespoke Investment Group.

Commodity weakness pressured stocks on Wednesday. The surging price of precious metals has worried investors recently and silver prices suffered their worst one-day dollar drop in three decades on Tuesday as hedge funds started to sell the commodity. The energy, utilities and materials sectors led the market's decline on Wednesday. Crude-oil prices fell below US$110 a barrel, while gold futures also declined.

On the JSE, Anglo American (AGL) eased 6.55 rand or 1.94% to 331.50 rand, BHP Billiton (BIL) lost 3.84 rand or 1.42% to 266.96 rand and Sasol (SOL) declined 7.12 rand or 1.93% to 361.40 rand.

Among gold counters, Anglogold Ashanti (ANG) slid 7.80 rand or 2.42% to 314.20 rand, Gold Fields (GFI) fell 3.11 rand or 2.75% to 110.00 rand and Harmony (HAR) gave up 3.00 rand or 3.09% to 94.00 rand.

Junior gold miner Randgold (RNG) plummeted 20 cents or 6.90% to 2.70 rand. At the close only 211 shares in Randgold had traded.

Platinum stock Impala Platinum (IMP) plunged 8.07 rand or 4.09% to 189.20 rand and Angloplat (AMS) slid 14.49 rand or 2.24% to 633.50 rand.

Aquarius (AQP), however, surged 2.68 rand or 7.30% to 39.40 rand. Aquarius said on Wednesday that both Aquarius and Aquarius Platinum (SA) had entered into a binding sale of rights agreement with Northam Platinum (NHM) and its subsidiaries to acquire the platinum group metals and associated base metals mineral rights on farms adjacent to its Everest Mine on the Eastern Limb of the Bushveld Igneous Complex in Mpumalanga.

Aquarius Group companies would pay the sum of 1.2 billion rand at transaction close to the Northam Group (net of any value-added tax and other tax charges that may arise from the transaction), subject to certain conditions being met.

Diversified miner Exxaro (EXX) erased 6.81 rand or 3.90% to 168.00 rand and African Rainbow (ARI) slipped 5.00 rand or 2.40% to 203.00 rand.

Steel producer ArcelorMittal (ACL) shed 2.01 rand or 2.31% to 85.00 rand and Kumba Iron Ore (KIO) dropped 14.55 rand or 3.14% to 448.49 rand.

In the industrial sector, SABMiller (SAB) edged down 3.07 rand or 1.24% to 244.29 rand and Barloworld (BAW) was off 1.44 rand or 1.92% at 73.50 rand.

Altron (ATN) surged 1.89 rand or 6.46% to 31.15 rand. The company on Wednesday announced diluted headline earnings per share of 223 cents for the year ending in February, from 196 cents previously.

The group reported adjusted headline earnings per share of 248 cents, from 220 cents in 2010, and grew adjusted diluted headline earnings per share to 243 cents, from 217 cents.

Altron's revenue increased by 2% to 22.8 billion rand, with earnings before interest, tax, depreciation and amortisation (ebitda) increasing by 6% to 2.1 billion rand, reflecting an ebitda margin of 9.2%, up from the prior year's 8.9%. The group reported dividend growth of 20% to 108 cents per share.

Banking group Standard Bank (SBK) eased 1.72 rand or 1.68% to 100.51 rand and FirstRand (FSR) lost 36 cents or 1.79% to 19.72 rand.

Construction group WBHO (WBO) slumped 4.61 rand or 4.02% to 110.00 rand.

Retailer Truworths (TRU) was 1.89 rand or 2.49% lower at 73.90 rand and Woolies (WHL) shed 80 cents or 2.68% to 73.90 rand.

Media giant Naspers (NPN) shed 11.47 rand or 2.97% to 375.09 rand.

Ferrochrome producer Merafe Resources (MRF) dropped six cents or 4.05% to 1.42 rand. The group said on Wednesday attributable production of ferrochrome for the first quarter of 2011 was 82,000 tonnes, equivalent to 91% of operating capacity.

The group said that ferrochrome producers achieved an 8% increase in the European benchmark price from $1.25 per pound in the first quarter of 2011 to $1.35 per pound for the second quarter of 2011, offset by the strong rand against the US dollar and overall cost pressures that are at levels well above inflation. - I-Net Bridge

Source: http://www.iol.co.za/jse-slips-as-commodities-weigh-1.1064408

Switzerland Marcus Bent The far right Small business Rape House prices