Shares slide as sell-off sends Aspen 4.4% down

SOUTH African stocks fell on Friday, dragged down by drug maker Aspen Pharmacare after its share price fell when GlaxoSmithKline (GSK) slashed its stake in the Durban-based group.

Aspen was the second-worst performer on the Top40 index, slipping 4.4% to R388.50, after Britain’s GSK sold a chunk of its shareholding at a discount.

“We saw Aspen move sharply lower after GSK halved its shareholding. The market is reading this as quite negative,” said Global Trader trading head Nilan Morar.

The Top 40 index of blue chips ended 0.9% lower at 45 873 points, while the broader All Share index lost 0.8% to 51 799 points.

Iron-ore producer Assore was one of the weakest stocks on the All Share index as the price of its steel-making commodity hovered near a record low below $60 (R746) a ton amid softer demand from China.

“The major stockpiles in the world, coupled with low growth forecasts and lower demand, and all of a sudden these companies are under pressure,” Morar said.

Assore fell 5.5% to R110.61, the lowest level in almost six years.

On global markets, the dollar continued to power higher, pressuring stocks and commodities, on expectations of a Federal Reserve interest-rate hike in contrast to easing monetary policy actions by most other major central banks.

The dollar index was on track for a back-to-back weekly gain of more than 2%, setting up its strongest two-week performance in almost five years.

Stocks fell in morning trade on Wall Street, with the Standard & Poor’s 500 set to fall for a third week running. The index is about 3% below its record high set this month. Energy shares weighed on it the most as crude prices fell near six-year lows plumbed in late January.

“As [oil] keeps falling there are bigger concerns that we could see problems with respect to capital expenditures and employment in certain regions of the [US],” said Michael Arone at State Street Global Advisors’s US Intermediary Business in Boston.

The Dow Jones industrial average fell 1.03% to 17 711.58 by 11am in New York, the S&P 500 lost 0.83% to 2 048.8 and the Nasdaq Composite lost 0.62% to 4 863.08.

The MSCI All-Country World equity index was down 0.8%, and emerging markets stocks fell 1%.

The FTS-Eurofirst 300 pan-European index closed down 0.1%.

Stocks in Europe continued to be supported by the European Central Bank’s bond-buying plan, which kept eurozone yields near record lows.

The dollar index added 0.6% to 100.06, and Brent crude fell 1.4% to $56.26. Spot gold was little changed near $1 154 an ounce. —