JSE declines as German GDP weighs

The JSE extended its losses in midday trade on Tuesday as worse than expected German GDP data weighed, while US futures also dipped into negative territory.

A local trader said that following gains in recent sessions, “German GDP data below forecasts weighed while US futures also point to a negative start on Wall Street.

“The market is still filled with relative fear, although short of panic as eyes will turn to the ECB (European Central Bank) and Fed chairman Ben Bernanke in the coming sessions with a decision on the possibility of QEIII looming. Until then expect continued volatility,” he said.

By 12:00 local time, the JSE all-share index had dropped 0.83%, with resources down 0.90%, but platinum miners added 0.54%, and gold miners gained 1.96%.

Banks lost 0.78%, industrials fell 1.06% and financials gave up 0.32%.

The rand was bid at 7.15 to the dollar, from 7.10 at the JSE's close on Monday. Gold was trading at US$1,779.35 a troy ounce from US$1,740.85 at the JSE's previous close, while platinum was at US$1,813/oz, from US$1,797.50/oz previously.

Dow Jones Newswires reported that US stocks were expected to start significantly lower on Tuesday, according to Michael Hewson, market analyst at CMC Markets. He called the DJIA to open 143 points lower at 11,340 points and noted disappointing second quarter German GDP data released earlier. “This has raised concerns that even if it wanted to, Germany's current growth path would severely hamper its ability to help bail out the rest of Europe.”

US economic data would kick off with the import price index and housing starts at 14:30 SA time. Industrial production was expected to follow at 15::15 SA time.

South Korean stocks soared and Japanese stocks edged higher after an extended rebound on Wall Street encouraged buyers, with mobile-handset makers getting a lift from Google's acquisition of Motorola Mobility Holdings Inc.

But caution prevailed in many other markets as investors looked toward a meeting of European leaders to discuss that region's debt troubles. Chinese stocks ended lower after advancing for four straight days, while those in Hong Kong, Australia and Taiwan squandered away early gains.

South Korea's Kospi surged 4.8% to 1,879.87 for its biggest one-day percentage gain since January 2009, and Japan's Nikkei Stock Average ended 0.2% higher. Hong Kong's Hang Seng Index dropped 0.2%, China's Shanghai Composite Index dropped 0.7%, and Taiwan's Taiex slipped 0.3%.

On the JSE, Anglo American (AGL) lost 3.65 rand or 1.27% to 283 rand, and BHP Billiton (BIL) dropped 5.19 rand or 2.18% to 233.30 rand. Sasol (SOL) was down 3.66 rand to 321.55 rand.

Among gold shares, AngloGold Ashanti (ANG) gained 7.17 rand or 2.26% to 325.12 rand and Gold Fields (GFI) landed 2.58 rand or 2.19% to 120.12 rand.

Among platinum stocks, Impala Platinum (IMP) was 127 cents firmer at 174.03 rand, but Aquarius (AQP) shipped 35 cents or 1.15% to 30 rand.

Royal Bafokeng Platinum (RBP) shed 62 cents or 1.12% to 54.98 rand. The independent black-controlled platinum group metals (PGMs) producer reported a 5% dip in first half attributable earnings to 172 million rand compared to 180.9 million rand for the first half of 2010.

Earnings and headline earnings per share were 105 cents for the six months to end June, 20.4% lower than the 132 cents reported for the first half of last year.

Kumba Iron Ore (KIO) lost 4.10 rand to 459.90 rand and diversified miner African Rainbow (ARI) declined 5.70 rand or 3.11% to 177.29 rand.

Among industrial stocks, British American Tobacco (BTI) gathered 2.68 rand to 316 rand; TigerBrands (TBS) dropped 2.28 rand or 1.15% to 195.30 rand and Barloworld (BAW) shed 1.15 rand or 1.85% to 60.85 rand.

ICT group Altech (ALT) pocketed 1.51 rand or 2.57% to 60.21 rand.

Capitec Bank Holdings (CPI) advised on Tuesday that there was a reasonable degree of certainty that its earnings per share and headline earnings per share for the half year ending August would exceed the comparable EPS and HEPS for the previous period by between 45% and 55%.

Capitec's shares advanced two rand or 1.16% to 173.75 rand.

Sanlam (SLM) advised on Tuesday that for the six months to June, it expected its headline earnings per share to exceed that reported in respect of the corresponding period in 2010 by between 25% and 35%. Its shares remained relatively flat at 26.37 rand.

Standard Bank (SBK) dropped 1.22 rand or 1.26% to 95.68 rand.

Mobile operator MTN (MTN) declined 2.41 rand or 1.73% to 136.88 rand.

In construction, Group 5 (GRF) lost 1.14 rand or 4.03% to 27.18 rand, Aveng (AEG) waivered 62 cents or 1.83% to 33.28 rand, and WBH Ovcon (WBO) lost 3.40 rand or 3.35% to 98.10 rand.

Pretoria Portland Cement (PPC) shed 65 cents or 2.68% to 23.60 rand.

Sugar group Illovo (ILV) gained 50 cents or 2.17% to 23.50 rand, but Tongaat Hulett (TON) fell 1.39 rand or 1.52% to 90.11 rand.

Compagnie Richemont (CFR) gave up 1.15 rand or 2.86% to 39.10 rand.

Media group Naspers (NPN) was 4.40 rand or 1.28% lighter at 339.60 rand. - I-Net Bridge