Mining stocks pull JSE down on China move

THE JSE closed weaker amid generally negative emerging-market sentiment yesterday following global rating agency Moody’s decision to downgrade China’s sovereign credit rating.

Moody’s assigned China a rating of A1, with a negative outlook from Aa3 previously‚ citing the country’s huge debt levels as a major risk for investors.

Commodities reacted negatively, with iron ore and copper sold off before recovering marginally, as questions arose on probable growth constraints in China.

A stronger rand added to the mining woes‚ with gold shares, platinum stocks and resources lower. Rand hedges also retreated.

Banks and financial shares‚ however‚ firmed on the rand, but retailers remained weaker.

The rand gained after betterthan-expected consumer inflation data increased the prospects of an interest-rate cut this year.

The all-share was 0.44% lower at 54 308.7 points and the Top 40 dropped 0.47%.

Platinum stocks lost 3.97%‚ the gold index 3.49%‚ resources 0.93% and industrials 0.71%. Banks rose 1.97%.