JSE falls amid fears over the US economy after Wall Street suffered its worst selloff in two years
Friday,Aug05, 2011
By RON DERBY
South African stocks slumped over 3% in early morning trade to its lowest level since September last year, following global stocks lower as investors worry about prospects for the global economy and talks grow of the US entering another recession.
"Investors are pricing in a slowdown in growth and sovereign debt problems as equities drop across the board," Manoj Ladwa, senior trader at London-based ETX Capital, said today.
Globally, shares dropped for an eighth day, the longest losing streak since January 2010 and commodities fell. More than $4.5 trillion has been wiped off equity market values worldwide since July 26, according to Bloomberg.
Locally, the sell-off was wide spread with only seven stocks in the 164-member JSE All Share Index in positive territory. The index reversed early losses to trade 1,8% weaker at 10:10 a.m. local time. Diversified miners, BHP Billiton was 3,8% weaker to its lowest level in close to 11 months. Smaller rival, Anglo American was 2,4% weaker to levels last seen in October.
After dropping as much as 3,3% yesterday, the rand was relatively stable at R6,93/$1.
The most anticipated economic data today is the release of the US payroll and employment numbers, with markets expecting them to come in weak.
The data is undoubtedly the most important statistical release in the world, Rand Merchant Bank foreign exchange analysts, John Cairns and Nema Ramkhelawan-Bhana, said in research note. "Its importance increases under current circumstances; if US employment growth holds up, then this could prove to be only a "soft patch" in global economic activity. If not … then our fears will start playing out."
Friday,Aug05, 2011
By RON DERBY
South African stocks slumped over 3% in early morning trade to its lowest level since September last year, following global stocks lower as investors worry about prospects for the global economy and talks grow of the US entering another recession.
"Investors are pricing in a slowdown in growth and sovereign debt problems as equities drop across the board," Manoj Ladwa, senior trader at London-based ETX Capital, said today.
Globally, shares dropped for an eighth day, the longest losing streak since January 2010 and commodities fell. More than $4.5 trillion has been wiped off equity market values worldwide since July 26, according to Bloomberg.
Locally, the sell-off was wide spread with only seven stocks in the 164-member JSE All Share Index in positive territory. The index reversed early losses to trade 1,8% weaker at 10:10 a.m. local time. Diversified miners, BHP Billiton was 3,8% weaker to its lowest level in close to 11 months. Smaller rival, Anglo American was 2,4% weaker to levels last seen in October.
After dropping as much as 3,3% yesterday, the rand was relatively stable at R6,93/$1.
The most anticipated economic data today is the release of the US payroll and employment numbers, with markets expecting them to come in weak.
The data is undoubtedly the most important statistical release in the world, Rand Merchant Bank foreign exchange analysts, John Cairns and Nema Ramkhelawan-Bhana, said in research note. "Its importance increases under current circumstances; if US employment growth holds up, then this could prove to be only a "soft patch" in global economic activity. If not … then our fears will start playing out."
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