JSE ends lower led by banks

Stocks ended weaker for the second day running yesterday, led south by banks ahead of the interest rates verdict later in the week, while negative sentiment overseas added to selling pressures.

The all share index closed 0.66% lower at 31,487.150. Resources added 0.26%, the gold mining index was up 1.34% but the platinum mining index fell 1.58%. Banks tumbled 3.08%, financials fell 1.88% and industrials were down 1.53%.

The rand was last trading at R7.84/$ from R7.83/$ when the JSE closed on Friday, while gold was quoted at $895.65/oz from $896.35/oz at the JSE's last close.

Traders said the market was under pressure from a range of factors that included Friday's sell off on Wall Street, shaky European markets and uncertainty about the size of the interest rate hike locally later in the week.

"Oil has come back a little bit and that's the season for early gains in New York," a Johannesburg-based trader said.

Concerns over inflation and a global economic slowdown as the price of crude moves within sight of $150 per barrel have been dominating investor sentiment for months. However, the losses on the local bourse were limited by firm commodity prices, with gold regaining its appeal as a hedge against inflation due to the rising price of crude oil, traders said.

Banks were in charge of the blue chips' loser board on the weaker rand and ahead of this week's interest rate decision, with some investors already pricing in a 100 basis point hike, while other see a softer 50 basis point rate increase.

Standard Bank slumped R3.36, or 3.96%, to R81.39, Nedbank was down R3.10, or 3.15%, to R95.30, FirstRand eased 30 cents, or 2.07%, to R14.18 and Absa fell R1.25, or 1.41%, to R87.30.

On the resource index, Anglo American was up R11.89, or 2.36%, to R515.39 but BHP Billiton dipped R1.06 to R294.19. Sasol was off R6.56, or 1.36%, to R475.44. AngloGold Ashanti was up R1.99 to R275.99, Gold Fields added 70 cents to R99.20 and Harmony gained R3.80, or 4.09%, to R96.80. Anglo Platinum was up R9 to R1 339 while Impala Platinum fell R10, or 3.13%, to R310.

Telkom was down R1.49, or 1.00%, to R147.01. It earlier reported year-end results that traders described as disappointing in general, but was somewhat boosted by its 50% interest in cellphone group Vodacom. It reported that its operating revenue was up 9% to R56.3 billion in the year to March 31 2008. Operating profit, however, gained just 0.1% to R14.5 billion, with headline earnings per share falling 4.4% to 1 634.8 cents.

MTN slumped R5.85, or 4.15%, to R135. India's Reliance Communications and MTN have agreed "broad contours" of a deal to create a global telecoms powerhouse, but are still working out share swap details, a report in India's Economic Times said yesterday.