Johannesburg‚ Oct 29 (I-Net Bridge) - The JSE opened weaker on Monday morning‚ in line with world markets‚ with all the indices trading in negative territory and platinum stocks weighing the most due to continued labour problems in the sector.
At 9.22pm‚ the JSE all share index was 0.19% softer at 36‚800.35 points‚ with the top 40 dipping 0.23% to 32‚643.13. The platinum index shed 0.74%‚ while gold miners gave back 0.5%.
Eastern markets were also trading lower‚ with the Nikkei 225 closing flat (-0.04%)‚ while the Hang Seng index was seen 0.29% weaker at 9.06am local time. The New York Stock Exchange will be closed on Monday‚ as Hurricane Sandy approaches the US East Coast.
Rand Merchant Bank said the release of third-quarter gross domestic product (GDP) data for the US on Friday served as another reminder that US economic activity was improving. The economy expanded by 2% quarter on quarter‚ higher than the 1.3% registered in the second quarter.
EARNINGS DISAPPOINT
"That said‚ the disappointing corporate earnings releases last week and the looming fiscal cliff will cast doubt over the sustainability of the recovery. We remain comfortable with our expectation that the dollar should only see modest gains‚" the bank said.
"This week's data releases and events will keep financial markets busy‚ with a slew of global PMI (purchasing managers index) numbers.
"The US nonfarm payrolls data on Friday‚ however‚ will attract the most attention. We expect the releases to send mixed signals about the health of the global economy. US data should continue to paint a positive picture‚ while European data will likely disappoint further‚" the bank said.
"Apart from weak economic data‚ Spain's reluctance to request a bail-out will remain a drag on the euro‚ which will limit any significant rand gains.
THE SILVER LINING
"The market is‚ however‚ turning more positive on the outlook for China. Chinese manufacturing PMI is expected to increase to around 50 in October‚ a signal that the economy has bottomed in the third quarter. The improved outlook for China is likely to provide some support to commodities‚ which remain on a downtrend‚" it said.
On the local front‚ Anglo American (AGL) dipped 0.32% to R267.81‚ BHP Billiton (BIL) lost 0.55% to R274.50‚ while Sasol (SOL) added 0.61% to R371.43.
Among platinum counters‚ Impala Platinum (IMP) fell 0.67% to R151.98‚ while Northam Platinum (NHM) added 1.54% to R33.00.
In the gold sector‚ Gold Fields (GFI) gave back 0.54% to R103.08 and Harmony (HAR) shed 1.46% to R70.16.
Among banking counters‚ Nedbank (NED) added 0.21% to R181.61‚ after the bank said in its third quarter update on Monday morning that its interest income in the rose 9.2% to R14.5bn and noninterest revenues grew by 13.9% to R12.4bn.
Absa (ASA) was 0.71% softer at R139.01.
-I-Net Bridge