Stocks fall again on commodities rout, Kumba hits low

STOCKS sank for a second session in a row yesterday, pulled down once again by a global resources sell-off that saw platinum hit five-year lows and iron ore plumb a record trough.

Leading blue chip decliners, Kumba Iron Ore fell nearly 4.88 percent to R179, a five-anda-half year low, after the price of its commodity slipped below $60 (R723) a ton – its lowest since records began in late 2008 – under pressure from a global glut as China’s economic growth slows.

The rand fell to 13-year lows against the dollar but this offered no relief to local mining companies, which often benefit from a weaker domestic currency because they sell for greenbacks.

“The weak rand is not helping with commodity prices still going south.

“If commodity prices continue to fall, the rand will remain on the back foot. And this is not good for our market, inflation or anything,” Abri du Plessis, the chief investment officer for Gryphon Asset Management, said.

The resource rout was wideranging.

Platinum fell to a new near five-year low of $1 125.75 an ounce. The metal has dropped 5.1 percent since the beginning of the year on expectations of lower demand from the automotive sector and higher mine supply.

Impala Platinum dropped 4.88 percent to R63.50 and Anglo American Platinum declined 1.63 percent to R324.36.

The Top40 index was off 1.06 percent at 46 148.91 points and the broader all share index lost 1 percent to 52 088.54.

Trade was robust with more than 278 million shares changing hands, well above last year’s daily average of 183 million shares.

FTSE/JSE Africa Index Series