Stocks off the boil while investors fret over Lonmin
STOCKS made modest gains yesterday, coming off record highs reached in early trading as investors fretted that Lonmin’s wage increase deal with striking workers could trigger more pay demands in the mining industry.
The JSE all share index, the broadest measure of the stock market performance, lifted 0.05 percent to 36 463.14 points, after earlier touching a record high of 36 647.98 points. The benchmark Top40 index of blue chips was 0.08 percent firmer at 32 193.46 points.
Nagging worries about debt-strained euro zone members Greece and Spain also restricted the upside momentum that was underpinned by a firm gold price and aggressive measures by Japan’s central bank to stimulate economic activity.
“The Japan central bank’s move gave the market a positive sentiment and that helped commodities prices,” said BoE Stockbrokers trader Henre Herselman.
“But we still have euro zone debt crisis and no one knows if Lonmin’s pay deal will set a dangerous precedent.”
The JSE sustained some of its earlier momentum after higher at R87.80. Its shares rose more than 10 percent in early trade on news of the pay deal but gave up most of those gains as the reality of the extra costs to a company struggling with a shaky balance sheet and unprofitable mine shafts sunk in.
Gold miners topped the gainers list on the blue chip index as the yellow metal stayed near a six-and-a-half month high achieved earlier.
Harmony Gold jumped 4.42 percent to R77.75, Gold Fields climbed 3.71 percent to R109.93 and AngloGold Ashanti added 1.1 percent to close at R301.18.