[2008-08-18]  JSE tumbles as miners plummet
THE JSE fell hard on Friday, pressured by miners on falling commodity prices, although banks remained well in the black following Thursday’s interest rate decision, traders said. The all share index ended down 2,06%, weighed by heavy losses in the mining sector with gold shares down 5,68%, platinum shares tumbling 3,46% and resources sinking 4,85%.

However, banks rose 0,80% and financials added 0,58% while industrials improved 0,38%. “Sentiment has turned more bearish across the metals spectrum this morning after yesterday’s CPI reading (in the US) triggered speculation that the Fed may raise interest rates in order to cap inflation,” James Moore of The BullionDesk said.

Local traders said even the sharply weaker rand was not enough to halt the sell-off in commodity shares, with one saying, “The sell-off in the metals complex is too severe. Platinum stocks are under pressure, and gold and resources are also taking a hammering on the back of weakening commodity prices. It does not look like the dollar will pause any time soon because data suggest that the US will no longer cut interest rates,” Lavan Gopaul of Cortex Securities said.

However all was gloomy on the local bourse as financials, retailers and other interest rate-sensitive stocks posted decent gains following Thursday’s interest rates decision, Gopaul said.

Gold shares were the worst-hit stocks with AngloGold Ashanti (ANG) plummeting R14,80, or 6,64% to R208,20. Gold Fields (GFI) slumped R3,30, or 4,53%, to R69,50 and Harmony (HAR) dropped R3,75, or 5,91%, to R59,75. On the resource index, Anglo American (AGL) was down R15,37, or 3,58%, at R413,54 and BHP Billiton (BIL) fell R11,80, or 5%, to R223,98. Sasol (SOL) gave up R19, or 4,56%, to R398. Platinum miner Anglo Platinum (AMS) fell R44,19, or 4,51%, to R935,81 and Impala Platinum (IMP) was down R6, or 2,58%, to R227.

Among banks, Standard Bank (SBK) reversed R1,20, or 1,33%, to R88,70, but FirstRand (FSR) rallied R87c, or 5,63%, to R16,33. Clothing retailer Truworths (TRU) was 75c, or 2,42%, better at R31,75, Massmart (MSM) improved 320c, or 4,26%, to R78,28 and Lewis Group (LEW) inched up 20c to R39.

Among industrials, luxury goods group Richemont (RCH) was up 73c, or 1,61%, to R46,20, brewer SABMiller (SAB) was 101c stronger at R169, but Remgro (REM) was off R3,15, or 1,60%, to R193,85.

South African near-dated futures plunged on Friday as commodity prices continued to plummet. The near-dated Alsi contract ended a whopping 700 points, or 2,70%, in the red at 25180 — a far cry from the 31595 peak witnessed in May this year. A total of 33576 Alsi contracts changed hands compared with 50220 on Thursday, a Safex official said.

South African white maize futures ended virtually unchanged as investors juggled the weaker rand and losses on the Chicago Board of Trade’s (CBOT’s) after-hours electronic dealing. “We were expecting markets to trade higher, especially after the limit up overnight trade in the US over the past two days,” a trader said.

The September white maize contract gained R7 to R1922 a ton, December was R12 higher to R2010 and the in-delivery August contract fell R16 to R1906.

Another trader said the losses on the CBOT after-hours electronic trading platform forced traders to pause despite sharp falls in the local currency, which when weak makes exports cheaper. Dow Jones Newswires reported that CBOT grain and soybean futures fell overnight. The weather seemed benign, and funds were expected to continue liquidating in a volatile market, a trader said. “I think these swings in the market are driving people out,” he said.

Source: Businessday