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Johannesburg - The JSE was weaker at the opening on
Wednesday, in line with most major global markets, which were weighed by
concerns over European economic issues and as the latest US Federal Open Market
Committee minutes dampened expectations for more growth-boosting measures from
the Federal Reserve.
At 09:15 local time, the JSE All Share [JSE:J203] index was
off 0.92% following a 1.53% decline in resources, a 1.85% fall in gold miners
and a 1.15% retreat in platinum miners.
Industrials were 0.68% lower, banks shed 0.81% and
financials gave up 0.54%.
The rand was trading at R7.76 to the US dollar, from R7.68
at the JSE's close on Tuesday. Gold was quoted at $1 636.89 a troy ounce from
$1 673.88/oz at the JSE's previous close, while platinum was at $1 636.50/oz,
from $1 652/oz from the previous session.
"We have had a bit of a weak start. There are holidays in the Far East and global markets are weaker - so it's generally on the back of that.
"Across the board, it is looking pretty bleak - usually you see
something standing out, but there is nothing at the moment," said a local
equities trader.
She added that if there was anything positive, it would be
the weaker rand, which might help the local market a bit.
It was also a quiet start, with no major local
corporate news.
Dow Jones Newswires reports that European economic worries
continue to sap sentiment, leaving stock markets likely to start lower on
Wednesday.
For Wednesday's opening, Cantor Index is calling the FTSE down
16 at 5 822, the DAX off 52 at 6 930, and the CAC off 24 at 3 382.
"Recent news on the eurozone economy has damped hopes
that the (European Central Bank's) longer-term refinancing operations in
December and February had largely solved the eurozone's economic and fiscal
problems," said Capital Economics.
"Activity surveys like the purchasing managers' index
suggest that the (eurozone) economy contracted for a second consecutive quarter
in (the first three months of 2012), while the news on the labour market and
bank lending has also deteriorated," it said.
Wall Street futures are also lower on Wednesday, as stocks
fell on Tuesday after details from the US Federal Reserve's most recent policy
meeting offered no signals that immediate monetary stimulus is on the way,
prompting investors to question whether the rally can continue without a prime
driver.
The Federal Open Market Committee's March 13 minutes showed
agreement that the US economic recovery had strengthened moderately, but left
investors to question the Fed's appetite for launching additional bond buying,
or other new programmes, to shore up growth.
"One of the things underpinning the rally has been
Fed's easy-money policy, and this could be seen as the Fed moving to close off
the liquidity spigot to some extent," said Etai Friedman, head of equity
derivatives trading MKM Partners.
While Fed officials are prepared to buy or sell assets
"as appropriate to promote a stronger economic recovery", the minutes
didn't show widespread agreement for doing so any time in the immediate future.
"There's been a near-perfect correlation in equities
gains each time the Fed induced more liquidity into the marketplace," said
Mark Luschini, chief investment strategist at Janney Montgomery Scott.
"At
least for the time being, the deferment of (more monetary stimulus) seems to
suck the life out of the 'animal spirits', at least in the short term."
Asian shares were also mostly lower on Wednesday with Tokyo
at a multi-week low. Disappointing trade data out of Australia further weighed
the Sydney market and sent foreign currency investors rushing to buy the
safe haven Japanese yen.
Markets in China, Taiwan and Hong Kong were closed for public holidays, while the Nikkei ended down 2.29%.
