Tighter Chinese policy reins in currencies and bourse
February 15, 2010
Stocks dipped slightly, dragged lower by financials and banks and taking a cue from global peers as investors shied away from risky assets.
The JSE Top40 index of blue chips closed 0.34 percent lower to 23 569.11 points and the broader all share index was down 0.33 percent to 26 262.41 points.
"What really shocked the market was the news of reserve tightening in China. It stoked concerns about the emerging markets," Sasfin's David Shapiro said.
"It wasn't a wide spread sell-off," said Shapiro, adding that bourse heavyweight BHP Billiton and gold shares helped the market from falling further.
Financial services holding company RMB Holdings lost 3.76 percent to R28.43, Absa was down 1.92 percent to R130.45 and FirstRand dropped 2.38 percent to R17.64.
Anglo Platinum dropped 1.51 percent to R708.01 and Impala Platinum declined by 0.81 percent to R184.50.
Mustek gained 22.45 percent to R3.00 after it forecast a 40 percent to 50 percent rise in first-half profit and Sentula Mining jumped 5.1 percent to R2.89 after selling a coal mine to reduce debt.
Aspen Pharmacare increased 4.48 percent to R70 after the firm forecast as much as a 30 percent increase in first-half profit.
The rand dropped to a session low of R7.7458 against the dollar and was bid at R7.6945 to the dollar at 5pm on Friday, 4.29c weaker than Thursday's bid at the same time.
"The euro is weak, so the rand's going to continue to follow that really. Gold is not rising and every little (piece of) data that comes out of the US seems to be dollar bullish," said Ion de Vleeschauwer, the chief dealer at Bidvest Bank.
"We've had the Chinese surprise of an increase in the holdings, which does signal interest rate rises in the short-term, and that's not good for emerging markets as a whole.
"All these things are combining and that's definitely not playing in favour of the rand, although its still very strong against the crosses, like euro-rand and aussie-rand," de Vleeschauwer added. - Reuters
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