Johannesburg — SA's resource-heavy top-40 index reversed six successive sessions of gains by ending 1,57% lower yesterday after emerging-market equities were sold off due to a stronger dollar and consumer confidence in the US was weaker than expected.

The FTSE/JSE all share index closed 1,45% lower after the Dow Jones and Standard & Poor's 500 indices opened lower in the US late yesterday.

Cortex Asset Management portfolio manager Michele Santangelo said the JSE had fallen "quite hard" due to falling emerging-market stocks, which had tracked an equity sell-off in China. Two weak days in a row for the Dow Jones index in New York and weaker than expected US consumer confidence data released yesterday also hurt market sentiment . FFO Securities trader Wilmar Buys said: "A much expected pull-back. It is basically the market reacting on the dollar strengthening a bit overnight and also our market is just following the American market ... (which) has been quite negative for the past two or three days."

The dollar recovery triggered a sell-off in emerging markets as investors grew concerned about the scaling back of economic stimuli.

"The mood is a little nervous because of the dollar strength. Emerging markets benefit from a weaker dollar as no one wants to hold dollar cash. But when the dollar rises, the (emerging markets) rally corrects," said Aviva Investors emerging debt fund manager Kieran Curtis.

Sentiment was also weighed down by India's move to tighten credit to its commercial property sector, which came along with warnings about the threat of asset price bubbles.

Coming after the increase in interest rates in Israel and Australia, the move heightened jitters over the eventual withdrawal of stimulus measures that have underpinned the economic recovery so far.

On the JSE, gold shares fell on average 3% and gold miner Gold Fields fell 2,7% to R104,35, while DRDGold slipped 4,2% to 445c.

The gold price dropped to its weakest level in three weeks earlier yesterday, while the dollar posted its best gain since September on Monday.

The all share index has gained over 23% so far this year. Chinese and Indian shares tumbled up to 2% yesterday, amplifying the sell down seen earlier on US bourses.