The JSE has slumped in line with its international counterparts, as investors digested poor global economic data and reacted negatively to corporate news involving Deutsche Bank.
|||The JSE slumped on Tuesday in line with its international counterparts, as investors digested poor global economic data and reacted negatively to corporate news involving Deutsche Bank. Mining stocks led the decline, with the platinum and gold indexes easing more than 3%.
Kevin Algeo, portfolio manager at Imara SP Reid, said the sell-off was fuelled by disappointing Chinese production data, which indicated that interest rate cuts and new bank reserve requirements were starting to affect growth.
By 17:00 local time, the JSE all-share index added 1.55%, with gold miners sliding 3.19%, resources giving up 2.24% and platinum miners falling 3.13%. Banks lost 1.36%, industrials eased 1.02% and financials shed 1.36%.
The rand was bid at 6.61 to the dollar from 6.58 at the JSE's close on Friday. Gold was quoted at US$1,544.64 a troy ounce from US$1,543.60/oz at the JSE's previous close, while platinum was at $1,864.00/oz, from $1,848/oz previously.
Algeo also said the US government sued Deutsche Bank, Germany's biggest bank, for reckless lending, raising investor concern.
Dow Jones Newswires reported that US stocks slipped slightly lower as overseas markets eased and Pfizer's revenues disappointed investors at the tail end of a generally positive earnings season.
The Dow Jones Industrial Average fell four points to 12,803 in early trading.
Pfizer dropped 1.2% to lead the Dow's decliners after the blue-chip pharmaceutical company topped earnings expectations but reported revenue that fell shy of analysts' views. Pulling on the upside were telecommunications players AT&T and Verizon Communications, up 0.6% and 0.7% respectively.
Separately, car makers will be revealing April sales data throughout the day. General Motors rose 1.5%, while Ford Motor edged up 0.1%.
In economic news, the dollar continued to weaken against the euro and the yen, though it was up sharply against the British pound.
“The market here in the US has rallied on a weaker dollar, but there comes a point where that weaker dollar is an albatross,” said Jay Suskind, senior vice-president at Duncan-Williams.
In addition, Suskind said recent macroeconomic numbers “weren't that great” at a time when food and energy prices were increasing. “That's not a great recipe for the economy or the stock market,” he said. - I-Net Bridge
Source: http://www.iol.co.za/jse-slumps-1.1063861
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