Falling iron ore prices weigh on local bourse

STOCKS fell again yesterday, dragged lower by iron ore companies after the price of the steelmaking ingredient fell to a fresh five-year low.

The Top40 index lost 0.62 percent to 44 532.09. The broader all share index was down 0.44 percent to 50 150.48.

Kumba Iron Ore was the biggest decliner on the Top40 index, slipping 3.09 percent to R251, as the price of iron

ore was hit by oversupply and expectations of lower demand in top consumer China.

BHP Billiton retreated 1.44 percent to R282.36, while Arcelor

Mittal slid 3.46 percent to R31.

“Weakness in the Asian markets are putting pressure on the iron price and growth prospects globally are looking poor, but it seems like it has reached the bottom,” said Bruno Van Eck at Thebe Stockbroking.

The index of gold companies rose on the back of stronger prices for the yellow metal. It has gained 16 percent this week. Gold Fields led the index up yesterday, jumping 7.3 percent to R49.36.

Tiger Brands fell 0.33 percent to R376.30 after the company wrote down its money-losing Nigerian unit Dangote Flour Mills following a review of utilisation levels.