‘Double negative’ for metals on Fed comments, firmer rand

STOCKS closed flat yesterday as commodity shares, particularly the gold producers, pulled the market lower after an overnight fall in the spot price and the strengthening of the rand.

The Top40 index of blue chips edged down 0.07 percent to 30 526.43 points while the all share index closed 0.01 percent up at 34 298.48 points.

Gold stocks slid in early trade following a 5 percent overnight drop in the metal’s spot price after US Federal Reserve chairman Ben Bernanke gave no hints of a third round of quantitative easing.

While bullion clawed back some of its losses, adding more than 1 percent, gold stocks failed to catch up. The rand also weighed as it weakened 0.5 percent on the day.

The country’s top three gold producers all ended lower with

the worst hit. Its shares shed 3.7 percent to R95.33 while rival closed 2.5 percent lower R115.83. Shares in

fell 2.5 percent to end the day at R317.75.

“It’s been a double negative for gold stocks with the gold price falling on… Bernanke’s comments last night and on the stronger local unit,” said

at

Shares in Nedbank and Firstrand also advanced on the European Central Bank’s (ECB’S) move to inject cheap money into the region’s stagnating economy.

The ECB’S latest massive cash injection helped offset worries over growth and boost European banks.

gained 3 percent at R165.50, holding onto an 11year high, while shares closed 3.1 percent higher at R24.63.

Firstrand is the best-performing banking stock so far this year.

Advancers outnumbered the day’s decliners 151 to 130.