Profit-taking takes JSE lower

The JSE moved down further at noon as profit-taking continued to dominate local matters and the slightly firmer rand added its effect.

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The JSE moved down further at noon on Tuesday as profit-taking continued to dominate local matters and the slightly firmer rand added its effect.

A local trader said: “We're down again which is against the run of the international markets. Dow futures are up again.”

The trader said that the slightly stronger rand coupled with the consolidation in the market was dictating direction. Volatility on a day-to-day basis would continue.

At 12:00 local time, the all share index had weakened 0.60% to 31,638.27 points. Platinum counters dropped 1.02%, resources lost 0.74% and the gold index dropped 0.57%. Banks declined 1.71%, financials gave up 1.04% and industrials relinquished 0.29%.

The rand was bid at 8.34 to the dollar, from 8.33 at the JSE's close on Monday. Gold traded at US$1,710.28 a troy ounce from US$1,716.21/oz at the JSE's previous close, while platinum was quoted at US$1,545.20/oz, from US$1,557.20/oz at the previous close.

Dow Jones Newswires reported that European stocks traded modestly lower on Tuesday, as markets paused for breath after Monday's hefty gains across global equities, and also faced considerable pressure on negative comments by ratings agencies on the banking system and France.

The banking system posted the biggest losses early on Tuesday, after Moody's Investors Service stated it is reviewing subordinated and junior debt from 87 European banks for possible downgrade, saying the region's mounting sovereign-debt challenges have reduced governments' ability to support them. As such, the Stoxx Europe 600 banks index lost 0.9%.

Adding further pressure was a report by a French newspaper La Tribune on Tuesday saying France's prized triple-A credit rating “might” be put on review for a potential downgrade by Standard & Poor's Ratings Service soon. This report comes just weeks after S&P's Ratings Service published an erroneous message on France's triple-A credit rating.

Reinforcing worries about the eurozone economy, UBS revised its gross domestic product forecast for the region to show a drop of 0.7% in 2012 from growth of 0.2% previously, saying it thinks that the recession will start in the fourth quarter this year, rather than the first quarter of next year.

Indeed, EU leaders have another chance to demonstrate their efforts to stem the debt crisis on Tuesday, with a eurogroup meeting in Brussels scheduled for 18:00 local time (16:00 GMT), in which leaders are expected to decide on the next tranche of the bailout package to Greece.

On the JSE, Anglo American (AGL) was down 126 cents to R299.24, while BHP Billiton (BIL) shed 125 cents to R237.75 and Sasol (SOL) lost R5.58 or 1.48% to R371.42.

Among gold shares, Gold Fields (GFI) was down 98 cents to R128.02.

In platinum stocks, Impala Platinum (IMP) gave up R2.35 or 1.44% to R161.40.

Among other miners, Exxaro (EXX) lost R2.01 or 1.15% to R173 and African Rainbow Minerals (ARI) surrendered R2.04 or 1.19% to R169.38.

Barloworld (BAW) was up 67 cents or 0.95% to R70.85.

In banking and financial services, Nedbank (NED) lowered R3.76 or 2.69%, Standard Bank (SBK) weakened R1.73 or 1.79% to R95 and FirstRand (FSR) relinquished 39 cents or 1.96% to R19.51.

In retail, Woolies (WHL) shed 37 cents to R38.83 and Shoprite (SHP) lessened R1.80 or 1.38% to R128.94.

Media group Naspers (NPN) declined R6.75 or 1.90% to R349.25. The group on Tuesday increased its fully diluted headline earnings per share to 664 cents for the six months to end September from 612 cents for the corresponding period last year.

Headline earnings per share were at 692 cents from 633 cents previously.

Consolidated revenues increased 17% to R18.5 billion and operating profit was at R1.9 billion from R2.3 billion last year. - I-Net Bridge

Source: http://www.iol.co.za/profit-taking-takes-jse-lower-1.1188698

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