CNBC Africa Markets Report
Fri, 13 Jun 2008 16:02Janice Du Preez
US stocks were higher after the CPI figures were released. The inflation numbers were slightly higher, 0.6% in May, than the market’s expectation of a 0.5% rise, but this was seemingly good news for the market, which reacted positively. The increasing inflation, should, once the euphoria has subsided, be a dampener for the economy, and encourage a rate hike in the US. The All-Share Index appeared to discount the rise in global markets today as higher interest rates weigh on the interest rate sensitive sectors. The rand was bid around the 8.15 level after the 50 basis point rate hike failed to impress the currency market, and lower commodities prices adding to the pressure.
Banks were down more than two percent, while the broader financial sector was down more than one percent. Absa was trading almost four and a half percent down. While local economic factors continued to drag the banks lower, global conditions also remained a contributing factor. US Treasury Secretary Henry Paulson said that major banks were making progress toward achieving greater stability. Commerzbank today also lowered its 2008 outlook for three major European banks, citing their higher potential losses as a result of their exposure to structured and leveraged portfolios as a reason.
Gold mining was down almost three percent after the underlying precious metal fell on lower oil and a higher dollar. Platinum mining was almost two percent higher. Implats and Northam were leading the gains, trading around three percent higher. Platinum prices were trading in a tight range, looking for direction from the SA market regarding the power supply prospects and the possible national strike next month.
