Profit taking sees JSE end down
November 3, 2009
By Palesa Motloung
South African stocks ended deep in the red on Tuesday weighed by resource counters amid profit taking and risk aversion.
At 5pm the JSE all share index had lost 1.37%. Resources shed 1.19%, and platinum and gold producers weakened 0.43% and 0.16% respectively.
Banks gave up 1.80%, financials were down 1.38% and industrials weakened 1.56%.
The rand was bid at R7.85/$ from R7.85/$ when the JSE closed on Monday. Gold was quoted at $1,061.40 a troy ounce from $1,060.05 at the JSE's last close, and platinum was at $1,333.50/oz, from $1,331/oz at its previous close.
"There is profit taking, it was a negative day today. Risk aversion is also coming back into the market," a trader said.
"The risk aversion supports the dollar which in turn puts commodity prices under prices under pressure, and that is why our market is down so much. The bigger weight of our market is down.
"The rand is weak. It's stronger than its lows, but it's still very, very, weak and it's not even supporting these metals," he said.
"The Dow opened weaker and that is also weighing on our market. We are just following what is happening overseas," he added.
Dow Jones Newswire reported that US stocks opened lower on Tuesday on some economic jitters ahead of a two-day policy meeting from the Federal Reserve, with traders looking past a decision by Warren Buffett's Berkshire Hathaway to purchase Burlington Northern Santa Fe in a bet on economic recovery.
Early on Tuesday, the Dow Jones Industrial Average traded off 50 points to 9747. Within the index, financials were particularly weak, including a decline of 1.4% for Bank of America.
Setting off the drop for financials, Swiss banking giant UBS AG fell more than 6% as it swung to a more than $500 million loss in the third quarter on a variety of charges, and cautioned that heavy withdrawals from wealthy clients will persist in coming months following a dismal performance from its private bank.
While stocks climbed on Monday with the Dow Jones Industrial Average up 76 points to open the week, the move did little to dent a string of triple-digit declines in the Dow Jones Industrial Average last week.
Better-than-expected data on manufacturing and housing helped, though a string of other economic data remains weighing over the market this week. For Tuesday, traders will be
keyed into US factory orders for September, due out at 10am EST.
In addition, the Federal Open Market Committee begins its two-day meeting on Tuesday - traditionally no word comes from the Fed on the first day.
Given the fact moves in the dollar have regularly served as an important tool for stock traders, there is heightened focus on the Fed's statement expected on Wednesday.
When the JSE closed, the Dow Jones Industrial Average was last off 0.27%.
Back in Johannesburg, Anglo American Plc lost R3.80, or 1.30%, to R289.20 and BHP Billiton shed R4.85, or 2.24%, to R211.26. Petrochemicals group Sasol was unchanged at R293.50.
Paper group Sappi was off 61 cents, or 2.12%, to R28.20 and Mondi gave up one rand, or 2.27%, to R43.10.
Highveld Steel was down R2.64, or 4.19%, to R60.36, ArcelorMittal gave up R3.80, or 3.63%, to R101 and Kumba Iron Ore shed R6.74, or 2.95%, to R222.01.
AngloGold Ashanti was up R2.80 to R302.90, but Gold Fields eased 29 cents to R101.50 and Harmony fell R2.44, or 3.09%, to R76.41.
Platinum miner Anglo Platinum put on R12.35, or 1.90%, to R664, but Impala Platinum was R3.04, or 1.78%, lower at R167.96 and Lonmin shed R4.75, or 2.42%, to R191.50.
Among industrials on the JSE, brewer SABMiller was down R3.43, or 1.64%, to R206, Imperial weakened R1.10, or 1.40%, to R77.49 and Barloworld was off R1.38, or 2.72%, to R49.37.
Banker Standard Bank lost R1.50, or 1.55%, to R95, Nedbank was down R3.50, or 3.02%, to R112.50, Absa fell two rand, or 1.63%, to R120.50 and FirstRand weakened 36 cents, or
2.09%, to R16.89.
Sugar group Illovo lost R2.31, or 6.47%, to R33.40. It earlier said in a trading update that its headline earnings per share (HEPS) and earnings per share for the six months ended September 30 are expected to be between 25% and 30% higher than those of the previous
corresponding period.
Operating profits for the period are anticipated to increase by around 35%.
Illovo said its results are generally impacted by production volumes, domestic market sales, the level of the rand compared to other currencies, and by the world price of sugar.
Media group Naspers shed R11.60, or 4.13%, to R269.50.
Among retailers, Truworths was down R1.32, or 3%, to R42.68, Lewis declined R1.55, or 2.90%, to R51.90 and Mr Price lost R1.45, or 4.21%, to R33.
Construction group Aveng weakened 41 cents, or 1.02%, to R39.60.
Telecommunications group MTN Group collected 38 cents to R114.99, but Telkom was down R1.20, or 2.80%, to R41.61 and Vodacom gave up R1.32, or 2.50%, to R51.55.
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