JSE flat on US fiscal cliff‚ Greece

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The JSE was flat in early trade on Wednesday‚ with concern about the US fiscal cliff and no agreement on the restructuring of Greece’s debt causing some negative sentiment and risk-off trade.

At 9.34am‚ the all share index was flat (0.05%) at 37‚324.23 points with the top 40 index also flat (0.04%) at 33‚111.01 points. Industrials were in the lead‚ adding 0.17%‚ while gold miners fell the most‚ down 0.4%.

“After talks through the night‚ Greece’s creditors‚ for the second week running‚ failed to reach an agreement on restructuring the country’s debt. This postpones the payout of the next aid tranche. Talks will resume on Monday‚ leaving market uncertainty intact. The euro/dollar has reflected the news‚ dropping to 1.2750‚” Rand Merchant Bank said in a morning note.

“US Federal Reserve chairman Ben Bernanke warned last night that the Fed does not have the tools to counter a fall off the fiscal cliff. US markets have taken the comments negatively‚ although the point is obvious and focus should arguably have been on the assessment that good data suggests the US economy could perform really well next year. US housing data again surprised yesterday. The recovery in this key sector seems to be for real‚” RMB said.

“Commodity markets are trading lower amid a bout of risk aversion. Gold has been no exception and is further weighed down by the stronger dollar. The oil price‚ however‚ is searching for direction due to on-going tensions in the Middle East. After falling nearly US$2 on Tuesday amid reports that Israel and Hamas were close to reaching a cease-fire‚ the oil price is up again this morning as fighting continues in the Gaza Strip. While the Israeli attacks have not had a significant impact on the oil price over the past week‚ the situation is simply adding to an already tumultuous region. This is likely to keep the geopolitical risk premium elevated and poses upside risks to our year-end forecast of US$103/bbl‚” RMB said.

Among individual stocks on the JSE‚ AngloGold Ashanti (ANG) dipped 0.33% to R269.81 and Gold Fields (GFI) gave back 0.58% to R103.82.

Telecoms counter MTN Group (MTN) dipped 0.44%‚ while Vodacom (VOD) added 1.53% to R118.55.

Consumer goods group Tiger Brands (TBS) dipped 0.78% to R275.74 after the company released year-end results on Wednesday morning. It posted a 7.1% rise in diluted headline earnings per share in the year ended September to 1‚654.2 cents compared with the same period a year ago. - I-Net Bridge

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