JSE pummelled as world economic leaders congregate in Davos

While leaders from around the world gathered in Davos‚ Switzerland‚ to discuss the state of the global economy‚ stock markets around the world were in freefall‚ sparked by a decline in the oil price.

After rising on speculation of growing Chinese demand for oil and hopes of more stimulus from that economy‚ crude slipped once again to below $28 per barrel.

Oil is part of a basket of energy sources that is viewed as an indicator of economic health. Increasing demand and price point to growth‚ while the opposite reflects contraction.

CMC Markets chief analyst Michael Hewson said there seemed to be no respite from recent negative sentiment.

story_article_left1

"This inability (of markets) to sustain rebounds for any length of time continues to gnaw away at investor sentiment in the short term‚ and (it) keeps the pressure on the downside‚" said Mr Hewson.

At 12pm‚ the JSE all share was down 2.52% to 46‚425.40 points and the blue-chip top 40 index fell 2.70%.

The price of Brent crude oil slumped 2.61% to $27.97.

Leading indices were deep in the doldrums. Platinums led declines and were down 5.58%. Resources tumbled 4.39%. Industrials and financials shed 2.16% and 2.48% respectively. Gold was up 1.32% as investors searched for safe-haven assets.

European stock markets suffered deep losses as energy shares took a hit.

By noon (CAT)‚ the FTSE 100 had dropped 2.71%‚ the CAC 40 had given back 3.13% and the DAX 30 had declined 2.90%.

Among individual shares on the JSE‚ the share price of Anglo American plunged 6.94% to R53.62. The miner continued the sale of assets outlined by its CEO Mark Cutifani last year‚ agreeing to sell its Callide thermal coal mine in Australia. Anglo made the announcement early on Wednesday morning.

BHP Billiton fell 6.21% to R139.36. BHP cut its full-year 2016 guidance for onshore US petroleum to 109-million barrels of oil equivalent‚ from 112-million. The global miner also cut its guidance for iron ore from 247-million tonnes to 237-million tonnes. It said the cut was connected to the incident at Samarco Mineracao‚ a business it runs with Vale in Brazil.

Recently listed Anheuser-Busch InBev was down 1.79% to R1‚970.00.

story_article_right2

AngloGold Ashanti added 1.85% to R129.23‚ while Harmony climbed 3.46% to R28.40.

Capitec was off 3.39% to R456.01.

Naspers tumbled 5.47% to R1‚801.40.

Taste Holdings plunged 9.06% to R2.41.

Meanwhile in Davos‚ the designated theme of this year’s event is "the fourth industrial revolution".