Resource Stocks Fall as Fed Eclipses China: Johannesburg Mover
The FTSE/JSE Africa Resource 10 Index (RESI20) fell 1.8 percent, the most since May 30, to 47,880.47 by the 5 p.m. close in Johannesburg. BHP Billiton Ltd. (BHP), the world’s largest commodities company, dropped 2.7 percent, the most since May 23. Anglo American Plc (AGL) retreated 1.6 percent, the most this month.
China’s announcement of a reduction in lending and deposit rates came two days before the nation is due to report inflation, investment and output figures. The biggest buyer of South African raw materials is trying to boost a flagging economy amid concern that Europe’s worsening debt crisis threatens global growth. Bernanke said yesterday the Fed will need to assess conditions before deciding if more measures are needed to stoke the economy.
“The real loss of risk-on sentiment appears to be Bernanke’s Congressional testimony which apparently offered little clue of more stimulus,” Quinten Bertenshaw, a Johannesburg-based analyst at Tradition Analytics, said in e- mailed comments. “Until Chinese numbers start improving we are likely to see a lot of nerves in markets generally, and toward China-exposed emerging markets in particular.”
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