[2008-09-10]  JSE slumps 3% on falling commodities
SOUTH African stocks extended losses in late trade yesterday, ending more than 3% in the red, with miners hit hard as metal prices buckled under a stronger dollar and the weakening price of crude oil, traders said.

“It’s a very bad day for commodity prices across the board. This strengthens the view that this is the end of the bull run, and this is not good for share prices,” a trader said.

Commodity prices suffered widespread falls during the session, with gold dropping as low as $776/oz as the stronger dollar and the weaker crude price wiped out the metal’s appeal as an alternative investment asset.

Yesterday’s sharp losses wipe out all the gains logged on Monday after investors applauded the US government’s move to rescue mortgage financiers Fannie Mae and Freddie Mac.

“Yesterday’s encouraging developments in the US do not eliminate the negative outlook for the macroeconomic environment, and although some short covering and bargain-hunting created a brisk rally it would seem that a determined follow-through is lacking,” Ernie Gruhn of Imara SP Reid said.

The all share index ended 3,50% lower, with resources down 7,01%. The gold and platinum mining indices plummeted 8,19% and 5,35% respectively.

Banks lost 0,94%, financials were down 0,16% and industrials gave up 1,18%.

On the JSE, Anglo American (AGL) lost R25,75, or 7,57%, to R309,50 and BHP Billiton (BIL) dropped R13,75, or 6,60%, to R194,50. Sasol (SOL) plummeted R29,70, or 7,88%, to R347,30. Gold miner AngloGold Ashanti (ANG) nose-dived R14,56, or 7,66%, to R175,44, Gold Fields (GFI) sank R5,45, or 8,46%, to R58,95 and Harmony (HAR) plunged R6,51, or 10,59%, to R54,99.

Among platinum miners, Anglo Platinum (AMS) surrendered R57,50, or 6,73%, to R797, Impala Platinum (IMP) was down R8,01, or 3,97%, to R193,99, Lonmin (LON) sagged R59,50, or 12,23%, to R427 and Aquarius Platinum (AQP) was R8,44, or 13,66%, in the red at R53,36.

Elsewhere on the JSE, SABMiller (SAB) was down 180c, or 1,05%, to R169, Richemont (RCH) was off 75c, or 1,64%, to R45, but Tiger Brands (TBS) bucked the trend, gaining R3,15, or 2,22%, to R144,95 rand.

Construction stocks posted decent gains, led by cement maker PPC with R1,06, or 3,32%, to R32,97. Murray & Roberts (MUR) was up R3, or 2,94%, to R105, Group Five (GRF) was up R1,30, or 2,30%, to R57,70 and Aveng (AEG) added 92c, or 1,33%, to R69,92.

Among banks, Standard Bank (SBK) fell 227c, or 2,39%, to R92,88, but Absa (ASA) added R1,50, or 1,33%, to R114,50. Furniture maker and distributor Steinhoff International (SHF) fell R1, or 5,29%, to R17,90.

South African near-dated futures plummeted yesterday on the back of lower commodity prices which weighed heavily on mining stocks. Commodity prices fell on a stronger dollar and lower oil prices.

The near-dated Alsi contract ended 645 points, or 2,69%, lower at 23364. This was in sharp contrast to the previous day’s gains of more than 3,5%.

A total of 83408 Alsi contracts changed hands compared with 84141 on Monday, a Safex official said.

South African white maize futures were sharply lower yesterday, driven mainly by weaker international commodity prices. “There is still a lot of negative sentiment towards commodity prices,” a grains trader said.

The December white maize contract was down R50 to R1888 a ton, March maize lost R47 to R1967 and in-delivery September maize shed R43 to R1822.

“At the moment, there is nothing to be optimistic about in terms of the short-term outlook on our markets, and that is why local markets are drifting low,” the trader said. “There is a spillover from international markets — that is what is affecting our markets,” another trader said.
Source: Copyright © 2005 BDFM Publishers (Pty) Ltd.