JSE slides 2% on jittery global markets

10 July 2016 - 02:00 By Andries Mahlangu

Strong US jobs data provided a silver lining at the end of a very tough week for global markets.The US economy added 287,000 jobs in June, blowing past market estimates and marking a substantial improvement from May, when 11,000 jobs were created.The report helped improve sentiment that had been undermined by the UK vote to leave the EU late last month."Volatility and uncertainty have continued to grip global markets after a brief post-Brexit rally," said Nadir Thokan, investment strategist at 27four Investment Managers.The unfolding UK-EU standoff has had a marked impact on the JSE. Resources, especially gold miners, have managed to ride out the storm, thanks to the gold price, which tends to thrive in uncertain times.Although eking out some gains on Friday, the All Share index ended the week 2% weaker at 51246.40 points, dragged down mainly by financial and industrial stocks.Gold stocks outperformed for a third consecutive week, with Pan African Resources and Harmony Gold jumping 18% and 13%, respectively."We've moved into uncharted territory, and it may take some time before investors at home and abroad fully understand the impact of this result on UK businesses, the UK and European economy - and indeed the global economy," Alwyn van der Merwe, director of investments at Sanlam Private Wealth, said in a note.The UK is in limbo as its Conservative Party needs to elect a new leader in September to replace outgoing Prime Minister David Cameron. The new leader will have to decide whether and when to trigger Article 50 of the EU treaty, which formally sets the stage for talks to exit the bloc.The uncertainty has pummelled the pound, which sank to fresh 31-year lows this week of below $1.30 before recovering slightly.The rand was relatively flat against the dollar on the week on Friday, having traded in wide ranges of between R14.46/$ and R14.95/$...

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