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Johannesburg - Share prices stabilised on the JSE on Wednesday morning, despite the fact that oil and commodity prices are still under the same pressure as Tuesday when the market experienced the biggest one day drop in a year.
Bargain hunters came to the fore as always, but it does not necessarily mean that the tide has turned for the market.
Some of the major indices are still battling to break through important resistance levels, which must be breached on high volumes for the market to run again.
The oil price, which was the trigger that sent share prices tumbling on Tuesday, was fairly volatile on Wednesday and by midday Brent for delivery in January traded at $65.94 per barrel, which is 0.78% lower than Tuesday.
Ferdi Heyneke, portfolio manager at Afrifocus Securities, warned after Tuesday's sharp drop that the market is going to remain volatile and will depend on underlying commodity prices.
By midday the All-share index improved with 0.36% to 48 729 points and the Top 40-index gained 0.36% to 43 063 points. The Top 40-index dropped through the important support level of 43 600 on Tuesday and was on Wednesday still way below that important mark. The index is also below its 200-day moving average, which is another important target that must be reached.
The Financial index was 0.32% higher and the Industrial index gained 0.38%. The Resources index was also 0.42% stronger, despite important commodity producers such as BHP Billiton and Kumba reaching new lows this morning.
BHP Billiton [JSE:BIL], which has huge oil interests, was however only marginally lower and traded 0.14% softer on a new low of R253.23.
Kumba [JSE:KIO], one of the big exporters of iron ore, lost another 1.42% to R239.30. This share is now becoming incredibly cheap after losing 38.4% of its value over the last year. It is currently trading at a price earnings ratio of only 5.41.
Sasol [JSE:SOL], which lost 26.8% over the last month due to the drop in the oil price, did not drop further on Wednesday, but by midday the share price was 0.13% higher on R403.51.
Gold is however coming to the fore as a safe haven in uncertain economic terms and gold shares are benefitting with the gold price firmly above $1 200 per ounce again. The gold index improved with 2.88% after gaining more than 3% on Tuesday.
Most of the gold shares gained on Wednesday morning, but gold shares have performed differently over the past few months.
Gold Fields [JSE:GFI] reached a new 52-week high on Wednesday morning and Sibanya is still more than 60% higher than a year ago, but Anglogold Ashanti and Harmony are sharply down for the last year.
Gold Fields, which have limited exposure to South Africa, increased with 4.37% to R51.84 on Wednesday morning and is now 24.5% higher for the year, after gaining 32.7% over the last six months.
Sibanye [JSE:SGL], which was unbundled from Gold Fields and now owns almost all of Gold Field's South African interests, was on Wednesday morning still 66.2% higher for the past year after gaining another 2.58% to R21.10.
These gains were however mostly made in the first half of the year, as the share is now 22.1% lower over the past six months.
Anglogold Ashanti [JSE:ANG] only gained 0.41% to trade at R101.66 and has now lost 40.8% over the last six months, which means that the share is now 24.6% lower than a year ago. Harmony [JSE:HAR] is 24.5% lower for the year after dropping 32.7% over the last six months. On Wednesday the share only gained 0.39% to R20.68.
