WHILE global markets were languishing in negative territory amid a fresh wave of risk aversion, the JSE was experiencing a technical bounce in midday trade today.
At noon the JSE all share index was up 0.18%, with resources flat having recovered from their lows, and industrials 0.47% higher. Platinum miners however were down 0.65% and gold miners down 0.73%.
Banks were 0.27% weaker but financials 0.4% firmer.
The rand was bid at R7.59/$ from R7.59/$ when the JSE closed yesterday. Gold was quoted at $1,094.83 a troy ounce from $1,093.40 at the JSE's last close, and platinum was at $1,515.50/oz, from $1,512.50/oz the bourse's previous close.
"In contrast to European and Asian markets which are lower on a rise in risk aversion, the JSE is experiencing a technical bounce. The market has been a bit over-sold for a while so it was due for a correction. Resources and industrials are off their lows," a local equities trader said.
The market paid scant attention to consumer price inflation data which showed the consumer price index (CPI), which is used by the South African Reserve Bank (SARB) for its inflation target, up 6.3% year-on-year (y/y) in December from 5.8% y/y in November.
It was expected to have registered 6.5% year-on-year (y/y), according to a survey of 11 leading economists by I-Net Bridge. Forecasts among the economists ranged from 6.0% to 6.5%.
Dow Jones Newswires reports that European stocks dropped today, with banks leading the declines, as risk aversion prompted by concerns about China tightening bank lending hit equities while benefiting the yen and the dollar.
By 0855 GMT, the pan-European Stoxx 600 index was down 1.3% at 246.1.
London's FTSE 100 was 1.3% lower at 5206.2, Frankfurt's DAX declined 1.3% to 5592.6 and Paris's CAC-40 fell 1.7% to 3744.1.
The recent decline in global equities has been due partly to economic concerns and fears about banking regulation but the falls also form part of a much-needed correction in equity markets following the strong start to 2010, some analysts said.
Asian markets also suffered another day of declines today, with concerns about Chinese bank lending restrictions sending Hong Kong and Shanghai shares further lower.
Indian and Australian stocks were also sold down amid fears of monetary tightening, with banks and materials shares hit hard.
China's Shanghai Composite lost 1.1%, Hong Kong's Hang Seng Index fell 0.4% to decline for the 11th time in 12 sessions, Japan's Nikkei 225 Average and South Korea's Kospi dropped 0.7% each, and Taiwan's Taiex gave up 0.5%.
Dow Jones Industrial Average futures were down 8 points in screen trade.
Khoon Goh, senior economist at ANZ bank in Wellington, said the markets are likely to be in limbo ahead of the outcome of the US Federal Reserve's meeting later in the global day. "With so much going on, there is a sense that markets are somewhat undecided about what it all means," he said, referring to concerns about growth in China, lending restrictions on Chinese banks and proposed restrictions on US banks.
On the JSE, Anglo American eased R1.56, or 0.52%, to R296.45 but BHP Billiton gained R1.56, or 0.67%, to R233. Sasol added R2.52 or 0.90% to R283.52.
Platinum miner Anglo Platinum was R7.21, or 0.99%, richer at R721.95, but Impala Platinum shed R3.73, or 1.85%, to R198.17.
Among gold counters, AngloGold Ashanti declined R1.51 to R285.50, while Harmony shed 80 cents, or 1.08%, to R73.51 and Gold Fields gave up R1 or 1.08% to R92.
Highveld Steel profited R1.68, or 2.79%, to R61.98 and Kumba Iron Ore picked up R1.76 to R313.76.
Among industrials, British American Tobacco collected 255 cents to R251.30 and SABMiller added 204 cents to R204.04.
Barloworld however, gave up 49 cents, or 1.09% to R44.39.
Among banks, Nedbank added 89 cents to R121.49 but Absa was down 27 cents at R131.
Among telecommunications stocks, Vodacom was 50 cents better off at R53.35 while MTN was up 51 cents at R106.90.
Media giant Naspers was R2.20 firmer at R277.20.
A short while ago Hudaco Industries was down R1.30, or 2.04%, to R62.50. The group said today that its results for the year ended November 2009 are better than had previously been expected and earnings per share, headline earnings per share and normalized earnings per share are now expected to be between 15% and 22% lower than in the previous financial year.
In October Hudaco had said, on the basis of trading results for the first 10 months, it was expecting EPS, HEPS and normalized earnings per share for its financial year ended November 2009 to decline between 20% and 30% compared with the previous financial year.
