Isra-Mart srl: US uncertainty drives JSE down

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The JSE continued in negative territory when it went into midday trade on Monday. All global stocks except US markets, which were closed for a holiday, were in the red with most of them still responding to the weak US jobs data, which came out of Friday.

A local trader said there was still a lot of volatility in the markets, and that the weak jobs number out of the US raised concern about a possible recession in that country. "Sentiment is uncertain and negative and everyone is waiting for Obama’s upcoming address for an indication of any stimulus," the trader said.

He noted however that some retailers and banking stocks were doing well.

By 12:17 local time, the JSE all-share index was off 1.38% to 30,097.12 points. Resources gave up the most at midday, shedding 2.14%, followed by platinum counters which declined 1.86%, and industrials which lost 1.16%. Financials shed 0.66%, and banks were 0.32% lower.

Gold shares bucked the trend, lifting 1.31%.

The rand was bid at R7.09/$ from R7.06/$ at the JSE’s close on Friday. Gold was trading at $1,895.92 a troy ounce from $1,874.12 at the JSE’s previous close, while platinum was at $1,877/oz, from $1,875.20/oz previously.

Dow Jones Newswires reported earlier that European stock markets slid on Monday, after Friday’s weaker-than-expected US monthly payrolls report fuelled worries about a further deterioration in economic conditions, leading investors to dump equities and the euro currency, and instead favour traditional safe havens such as the Swiss franc and core government bonds.

At 0806 GMT, the benchmark Stoxx Europe 600 index was down 2.1% at 228.13. Frankfurt’s DAX was down 2.7% at 5387.17, and Paris’s CAC-40 was 2.6% lower at 3068.23.

At 12:02 local time, London’s FTSE 100 was 2% lower at 5186.19.

Eurozone economic growth slowed to a two-year low in August, a closely watched survey of business activity showed Monday, the latest in a string of data to suggest the economy is faltering.

The market will look forward to the European Central Bank’s policy meeting, due on Thursday for more details on the central bank’s action to tackle the current debt crisis. "The expectation of a more dovish stance from the ECB may also weigh on sentiment, suggesting downside risks," said Lloyds Corporate Bank.

On the JSE, BHP Billiton dipped R9.52 or 4.11% to R222.33, while Sasol added eleven cents to R326.11.

Anglo American lost R7.85 or 2.78% to R274.50. Anglo and resources giant Rio Tinto on Monday announced plans to sell their combined 74.5% stake in Palabora Mining, the owners of SA’s largest copper mine.

Among gold shares, Anglogold Ashanti added R7.14 or 2.22% to R329.27, and Harmony rose 99 cents to R97.74.

Most platinum miners were in the red, with Amplats declining R17.14 or 3.07% to R541.01, Lonmin falling R5.65 or 3.91% to R139, while Aquarius lost R1.06 or 3.96% to R25.71.

South African-based copper and cobalt miner Metorex on Monday reported a 155% increase in its first half headline earnings per share on the back of higher production and better commodity prices.

The company, which is the subject of a R9.1bn takeover bid by Chinese mining and refining group Jinchuan, reported adjusted headline earnings per share of 31 cents or $4.5 cents for the six months to end June 2011 from 13.2 cents or $0.6 cents in the six months to end June 2010.

The miner was last three cents off to R8.32.

In industrial stocks, Imperial dropped R2.15 or 1.84% to R114.50.

In construction, Group 5 was 30 cents or 1.16% lower at R25.59, while Aveng rose 42 cents or 1.26% to R33.70. The construction group on Monday reported a 35% drop in its diluted earnings per share after difficult trading conditions in SA and project challenges in Australia pulled earnings lower.

The company reported diluted headline earnings of 286.6 cents a share for the 12 months to end June 2011, compared to diluted headline earnings of 444.4 cents a share a year ago.

Profit for the year declined 37% to R1.17bn, while a dividend of 145 cents a share was maintained. Revenue of R34.3bn was realised.

WBH Ovocon lifted 30 cents to 98 rand. The civil engineering and construction contractors on Monday reported a 20.1% decline in diluted headline earnings per share to 1,402.4 cents for the year ended June from 1,754.4 cents a year ago.

Revenue decreased 2.9% to R14.8bn, while operating profit before non-trading items declined 14.5% to R1.09bn rand, reflecting the decline in available work and consequential margin pressures.

Amongst retailers, JD Group gave up 86 cents, or 2.09% to R40.23 and Lewis lost R2.25, or 2.80% to R78.25.

Branded consumer products group AVI on Monday reported a 31.1% rise in diluted headline earnings per share (HEPS) from continuing operations to 239.7 cents for the year ended June 2011, from 182.9 cents a year ago. HEPS from continuing operations was up 31% to 248 cents.

Revenue from continuing operations grew 5.7% to R7.69bn and operating profit from continuing operations was up 25% to R1.1bn, while cash generated from operations increased 24% to R1.4bn.