South Africa’s mining index, accounting for 24 percent of the country’s stock market weighting, declined to its lowest in almost seven months as commodity prices fall on weak demand prospects.
The 19-member FTSE/JSE Africa Mining Index (JMNNG) retreated as much as 2.2 percent and traded 1.8 percent weaker at 29,103.90 by 1:48 p.m. in Johannesburg, the lowest intraday level since Sept. 6. BHP Billiton Plc (BIL), with a 47 percent weighting in the mining gauge, led the decline, falling 1.2 percent to 266.78 rand, set for its lowest since Nov. 16. Anglo American Plc (AAL) lost as much as 2.4 percent to its lowest intraday level since October 2009.
Africa’s biggest economy and host to the world’s highest platinum reserves in the Rustenburg region is facing low demand from emerging countries, labor unrest and higher energy costs. Commodity prices retreated. The spot gold price fell for a second day, retreating 0.3 percent to $1,571.22 an ounce, the lowest intraday level since March 8. Platinum retreated 0.2 percent to $1,569.16 an ounce.
“Gold, platinum and copper prices are down and that will lead to weaknesses on mining equity prices without a doubt,” Brandon Sacks, a trader at Johannesburg-based Avior Research Pty Ltd., said in a phone interview. “I am not convinced that there will be higher demand from big consumer countries like China until next year.”
Today’s fall in the mining gauge drove the 166-member FTSE/JSE Africa All Share Index to its biggest decline in a week. On a closing basis, the main measure is set for the lowest since Feb. 27, data compiled by Bloomberg show.
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