JSE down on growth jitters

THE JSE closed weaker yesterday as local and global growth concerns weighed on markets.

Finance Minister Pravin Gordhan projected lower GDP growth this year when he presented his medium-term budget policy statement on Wednesday‚ putting a damper on market sentiment.

Gordhan lowered the expected GDP growth figure for this year to 0.5% from 0.9%. He also said the budget deficit was expected to widen to 3.4% of GDP‚ from 3.2%.

Capital Economics analysts said that although the South African government adjusted its deficit forecasts in light of weak GDP growth this year‚ they expected that the forecasts would remain too optimistic and that South Africa’s debt load would continue to rise.

Global markets retreated yesterday following Wednesday’s release of disappointing Chinese industrial profit growth data for last month, while the oil price was also softer on the day.

IG market analyst Shaun Murison said the JSE had been under pressure for most of the day‚ taking its cue from weaker Asian markets earlier in the day.

A slightly higher opening on US markets did however help lift the all-share index well off its lows‚ he said.

Among individual shares‚ Sibanye Gold slumped 7.11% to R38.79‚ despite an earlier trading statement indicating that the company expected earnings per share for the year ending December 31 to be a minimum of 200% higher than in the year-earlier period.