Positive US jobs figures hit local mining stocks

SOUTH African stocks were dragged lower by a slide in mining share prices on Friday as stronger-than-expected US jobs data hit gold prices.

The Top 40 index fell 2.35% to close at 34 685 and the All Share index 2.15% to 39 170.

AngloGold Ashanti, the world’s third-biggest bullion producer, led the decliners, slumping 7.04% to R128 as a firmer dollar pushed gold’s spot price down 3% on Friday. Gold Fields was 1.41% lower at R48.90 and Harmony 1.45% at R35.46.

A 1.9% fall in platinum also depressed shares in Anglo American Platinum, the world’s top producer of the precious metal, which dropped 4.85% to R282.82. Impala Platinum edged down 0.46% to R93.37.

European shares sensitive to changes in economic sentiment led the market lower, with the basic resources sector down 4.1%.

The FTSEurofirst 300 index was down 0.8% after it gained 2.4% on Thursday. MSCI’s global share index was down 0.2%.

US stocks rose in a seesaw session on Friday after solid jobs figures pointed to a strengthening economy. But the report also raised the odds that the Federal Reserve would begin to cut its stimulus measures in the next few months.

Employers added about 195 000 jobs last month, exceeding expectations of 165 000.

Jobs growth in previous months was revised higher. But the unemployment rate remained unchanged at 7.6%.

Major indices hit higher levels in early trading, but pulled back and were nearly flat before advancing again. Volume was light. Sectors tied to the pace of economic growth and an improved outlook for lending advanced, including small-cap shares and banks.

The Dow Jones industrial average was up 3.72 points, or 0.02%, at 14 992.27. The Standard & Poor’s 500 Index was up 2.48 points, or 0.15%, at 1 617.89. The Nasdaq Composite Index was up 6.03 points, or 0.18%, at 3 449.70.

About 1.8 billion shares had changed hands on US exchanges, lighter than average.

Interest rates rose sharply on Friday in anticipation that the Fed would start cutting its monthly bond buying — a key factor in recent gains in stocks — as early as September. Bank of America added 0.8% to $12.92 while Citigroup was up 0.5% to $47.89. Large banks benefit when interest rates rise as it increases their net interest margin.

The S&P small-cap 600 index gained 0.4%, moving within 1% of an a record high. The S&P 500 is down more than 3% from its May 21 record closing high of 1 669.16, and has been unable to close above its 50-day moving average since June 19.