Why Was There a Huge Sell Off on the JSE Yesterday?

By Vivian Atud

What: Johannesburg—Sunburst Africa—there was a huge sell off on the JSE yesterday with markets closing for a third day in negative territory. The JSE All-Share Index closed 0.6 percent in negative territory after trading closing 1 percent in negative territory the previous day.

Why: Volatility in global markets continued to wreak havoc on the JSE as investors continue fear sentiments that the US FED will begin to raise interest rates soon. Investors reacted by dumping mining stocks on the JSE as commodity prices continue to weaken.

Top Gainers Top Losers
TIGBRANDS 35204c 2.0% AMPLATS 30936c -4.6%
RMIH 4417c 1.9% ANGLO 19650c -3.6%
NASPERS-N- 171078c 1.8% IMPERIAL 18300c -3.3%
MR PRICE 25775c 1.8% KUMBA 17359c -3.0%
NETCARE 4237c 1.3% BHPBILL 25975c -2.8%
Trade Up Down Same Total*
Shares 130 203 388 721
Value R12.8B R15.2B R119.0M R28.2B
*Only traded items. As at 12 Mar 04:29

 

Among the top losers of the day were platinum firms as the index plunged to its worst level since 2005 as the metal price remained under pressure from a stronger dollar. Lonmin- the world’s third biggest producer of platinum saw its share price at a 17 year low yesterday and compounded the weakness in the platinum index.

Big sell-offs occurred in Amplats with its share price down 4.6 percent, Anglo American, down 3.6 percent, Imperial down 3.3 percent, Kumba down 3.0 percent and BHP Billiton down 2.8 percent. Total volume trade was 28.2 billion rand. Intense selling of less diversified miners such as Kumba Iron Ore, Exxaro and Assore pulled the resources index down 2.7% to its weakest levels since January 27.

Gold mining shares have almost wiped out the gains made since January 1, after having surged more than 30% in the first few weeks of the year.

Internationally, Wall Street traded lower as crude oil drags energy stocks lower, while investors continued to focus on when the Fed would raise rates. The Dow traded in the green by +0.07%, while the S&P 500 traded -0.10% lower, and NASDAQ traded -0.18% down. Asian markets ticked higher on hope of domestic economic recovery, ignoring previous session declines on Wall Street. The Nikkei closed +0.31% higher, while the Hang Seng closed -0.75% down. European indices traded higher as the multi-year low Euro helped exporters. The DAX traded higher by +1.65%, while the CAC 40 was higher by +1.51% and the FTSE 100 traded -0.12% lower. At local close Oil (Brent) traded higher by +0.34% at $56.58 while Gold traded lower by -0.79% at $1150.90. The dollar traded 1.19% stronger against the EURO at EUR/USD $1.0571. On the local front the All Share index closed lower by -0.09% and the rand traded 0.22% stronger against the dollar at R/USD 12.3397.

So what: investors need to continue to trade cautiously on the market today as global market conditions remain volatile. US FED will be meeting in the coming days and investors will continue to watch whether there will be an indication of when the FED will begin to raise interest rates. Locally, mining and manufacturing data for January 2015 is expected later today. Investors will cautiously trade on the markets this morning as they watch these figures.

 

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