Posted by Gilmour Poincaree on October 24, 2008

October 24, 2008

by Palesa Motloung

Johannesburg – The JSE opened deeply in the red on Friday, as panic gripped Asian and European markets, which went into free fall despite a firmer close on Wall Street overnight.

The JSE opened 4.08 percent lower in a continuation of Thursday’s trend when it ended down 3.4 percent. The local bourse continued to be weighed by heavy losses in mining and resources stocks as precious metals prices continued to tumble.

At 9.16am, the JSE’s all share index had fallen 4.25 percent, weighed down by platinum stocks which fell 7.77 percent, gold miners which were down 7.45 percent and resources which lost 6.39 percent. Banks gave up 4.49 percent, financials lost 2.50 percent and industrials gave up 2.86 percent.

The rand was bid at R11.37 to the dollar from R11.14 when the JSE closed on Thursday. Dealers said the currency would experience another volatile day of trade as the dollar continues to surge and equity markets remain weak.

Gold was last quoted at $704.57 per ounce from $726.15 at the JSE’s last close. Platinum was at $787.50 per ounce, down 1.87 percent from Thursday’s close of $802.50. Brent crude was at $65.15 from its previous close of $65.92.

A trader said that even though the Dow ended up 2 percent overnight, the local market was following events in Asia. The trader added that although the US managed to recover, this did not have much of an impact in the light of recent losses.

He said that the weak rand was not having an effect because metals and resources prices continued to come under pressure and were weighing on the market.

The Nikkei closed 9.60 percent and the Hang Seng was last down 7.75 percent. In London the FTSE was last down just over 4 percent.

Dow Jones Newswires reported that European stocks fell, tracking losses in Asian markets overnight on continued concerns over health of the global economy.

“The fall is led by a broad-based sell-off with miners leading the declines and a host of warnings from companies are weighing heavily,” says a trader.

On the JSE, Anglo American fell R19.70, or 8.61 percent, to R209.05 and BHP Billiton gave up R8.28, or 5.44 percent, to R143.97. ArcelorMittal shed R6, or 7.23 percent, to R77 while Highveld Steel added R1.49, or 2.18 percent, to R69.99.

Petrochemical giant Sasol was down R11.99, or 4.41 percent, to R260.01.

AngloGold fell R16.99, or 9.39 percent, to R164, Gold Fields gave up R4.25, or 6.72 percent, to R59 and Harmony shed R3.94, or 5.34 percent, to R69.81. Platinum miner Anglo Platinum plummeted R35, or 8.24 percent, to R390, Impala Platinum gave up R7.55, or 7.06 percent, to R99.45 and Lonmin came down R19.22, or 8.94 percent, to R195.78.

Brewer SABMiller was down R4.10, or 2.73 percent, to R146.11, Barloworld lost R2, or 4 percent, to R48 and Tiger Brands fell R4.68, or 3.72 percent, to R121.

Standard Bank shed R3.52, or 5.03 percent, to R66.47, Nedbank shed R2.81, or 3.53 percent, to R76.69, Absa fell R2.05, or 2.51 percent, to R79.75 and First Rand was down 58c, or 4.95 percent, to R11.14.

RMB Holdings was down 70c, or 3.78 percent, to R17.80, but Investec gained R3.60, or 8.91 percent, to R44.

In the retail sector, JD Group gave up R1.50, or 6.12 percent, to R23, Foschini was down R1.95, or 6.08 percent, to R30.10 and Shoprite was down R2.01, or 4.28 percent, to R44.99.

Packaging group Astrapak lost 40c, or 6.67 percent, to R5.60 and construction group Aveng gave up R2.79, or 6.52 percent, to R40.01 and Group Five lost R1.21, or 3.13 percent, to R37.40.

MTN Group fell R4.66, or 5.62 percent, to R78.33 and Telkom was down R4, or 4.14 percent, to R92.70.



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