JSE down for a fourth straight day

Better than expected non farms payrolls data out of the US was not enough to prevent the JSE from losing ground for a fourth straight day.

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Better than expected non farms payrolls data out of the US was not enough to prevent the JSE from losing ground for a fourth straight day on Friday.

The local bourse has shed in excess of 6% since Tuesday, tumbling a further 1.17% on the day as investors remain wary about the current fiscal state of the US and the eurozone.

A local trader pointed to a very volatile day of trade. The market went through a 600 pint range in 5 minutes. The local market tagged along with a late sell-off by US investors after the non-farms data was released.

By 17:00 local time, the JSE all-share index was down 1.17%, with resources losing 2.26%, gold miners dropping 1.86% and platinum miners shedding 1.52%.

Financials dropped 0.92% and industrials lost 0.33%, however banks took 0.34%.

The rand was bid at 6.87 to the dollar, from 6.89 at the JSE's close on Thursday. Gold was trading at US$1,663.07 a troy ounce from US$1,678.49/oz at the JSE's previous close, while platinum was at US$1,710/oz, from US$1,742.50/oz previously.

Dow Jones Newswires reported that US stocks zigzagged early on Friday as a better-than-anticipated jobs report couldn't fully calm investors.

The Dow Jones Industrial Average was recently up 10 points, or 0.09%, to 11,394.

The Dow tumbled 512 points on Thursday, its biggest point drop since December 1 2008. It's in the red for the year and has fallen more than 10% below the 2011 closing high in April, putting the measure squarely in correction territory.

The action comes as the US economy added 117,000 jobs last month, more than economists were expecting. The unemployment rate edged lower to 9.1%, which should help ease concerns that another recession may be around the corner. Recent reports have shown a drop in consumer spending, a slowing manufacturing sector and sluggish economic growth.

“One nice number isn't enough to change sentiment at the moment,” said Ted Weisberg, president of Seaport Securities. “Folks are scared and want to take risk off the table.”

In Europe, leaders are grappling with a widening debt crisis, which started in Greece and spread to Italy and Spain. An earlier bailout of Greece now appears insufficient. There are growing concerns about European banks and their heavy investments in the debt of countries with big fiscal problems.

There was no one single catalyst for Thursday's downdraft, traders said. Rather it reflected multiple concerns that have mounted over the past month and came to a head this week. Worries about a US default, settled by a last-minute fix to lift the country's debt limit on Tuesday, have given way to broader fears about the failing health of the domestic economy.

While the jobs report is a bright spot among the gloomy US economic data, some investors warn that it may be only a temporary salve to underlying worries that the economy may be heading toward a double-dip recession. - I-Net Bridge

Source: http://www.iol.co.za/jse-down-for-a-fourth-straight-day-1.1113025

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