Resources weigh on JSE

THE JSE closed softer on Monday‚ pushed down by gold miners and resources‚ amid low volumes and quiet trade as markets were closed yesterday to celebrate Heritage Day.

Gains in emerging markets were partially reversed on Monday after gains last week on the US Federal Reserve’s decision last Wednesday to hold off on tapering quantitative easing.

At 5pm, the all share index closed 0.17% softer at 44‚017.73 points‚ with the top 40 index ending 0.25% lower.

The resource index led the losers on the JSE‚ ending 0.42% weaker due to a lower copper price‚ followed by the gold index‚ ending 0.40% softer after Morgan Stanley lowered its gold price expectations on Friday‚ putting pressure on gold shares.

European shares were trading lower‚ with London’s FTSE 100 seen 0.53% softer at 5pm local time.

“Gold mining stocks are trading lower after Morgan Stanley put out a gold price prediction today (on Monday) saying the price of bullion will be closer to $1‚250 per ounce next year and the average this year will be $1‚450 per ounce.

“This prediction is a bit lower than their previous prediction and this put some pressure on the gold price and gold mining counters‚” a local trader said.

“The copper price is lower today because investors are questioning the reason why US monetary tapering was held off.

“Market participants are wondering if perhaps there is something bad awaiting markets down the line and that is why tapering was postponed. This put pressure on the copper price and resource counters‚” the trader said.

Among individual shares on the JSE‚ Anglo American (AGL) closed 0.78% lower at R248.27 and rival BHP Billiton (BIL) relinquished 0.67% to R295.76.

Resource counter Kumba Iron Ore (KIO) gave back 1.85% to R474.50 and Exxaro (EXX) ended 1.5% lower at R165.97. ArcelorMittal (ACL) bucked the trend‚ closing 2.62% firmer at R36.02.

Gold miner Harmony (HAR) was the biggest loser in the gold sector‚ shedding 3.46% to R36‚ followed by AngloGold Ashanti (ANG)‚ which gave up 1.20% to R131.88.

Financial services group Abil (ABL)‚ which has been under pressure since last week after a downbeat trading statement‚ shed 2.44% to R15.99.

Pick n Pay (PIK) led declines among retailers‚ dropping 4.16% to R43.13 on profit taking after a strong rally at the end of last week.