Miners under pressure amid global concerns
SOUTH African miners came under pressure on Monday as concerns grew over prospects for the global economy following disappointing jobs data out of the US, the world's biggest economy, and warnings about the Chinese economy, the second biggest.
The JSE all-share index declined for the first time in five days, while the rand weakened against the dollar for the fourth day.
Risk remains off the table following disappointment with the US jobs market data last week, said Patrick Mathidi, portfolio manager at RMB Asset Management.
Markets are concerned about the outlook for global growth, he said. "Growth has been hard to come by."
By mid-afternoon trade, the all-share index was 0,7% lower, with miners such as Exxaro Resources, Lonmin, African Rainbow, Kumba Iron Ore and AngloGold contributing to the downward pressure.
The sell-off in Exxaro, whose shares plunged as much as 6,1%, was triggered by Kumba's trading update released last week, which warned of lower interim profits because of lower iron-ore export prices.
Base metals such as iron ore have come under pressure in recent weeks as concern over China's growth has investors concerned about demand for raw materials.
Over the weekend, Chinese Premier Wen Jiabao said the country's economy faced "relatively large" downward pressure.
European stock markets were trading flat to weak ahead of a Eurogroup meeting later on Monday.
"Scepticism remains over today's European Union finance ministers' meeting due to divergences within the Eurogroup, particularly over the implementations of the bank recapitalisation measures," said Ishaq Siddiqi, market strategist at London-based ETX Capital, in a note.
He added: "Clients are worried that today's meeting will further highlight divisions between policymakers, exposing a lack of unity in the EU."
The rand weakened for a fourth day against the dollar. At R8,29/$ it was at its lowest level against the resurgent greenback since the last week of June.
The dollar has benefited as investors look to safeguard their wealth in US Treasuries rather than in equities.
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