Publications
Partners
Johannesburg - The stalemate in talks about Greece’s debt situation spilled over to the JSE on Friday morning.
The tug of war between technical support for oversold indices and the negative market tone after the International Monetary Fund walked out of Greece's bailout reform talks meant that there was initially very little movement on the local market on Friday morning. By midday the bulls were gaining the upper hand and the major indices were about 0.5% higher.
At that stage the All-share index was 0.49% higher at 52 135 points and the Top 40-index traded 0.49% higher at 52 135 points.
The Financial index, which is probably more sensitive to a financial fall-out if Greece defaults on its debt and is forced to leave the eurozone, was initially sharply lower but recovered most of these losses and by midday was only 0.06% lower.
The Industrial index was 0.62% higher and the Resources index gained 0.94% despite a stronger dollar, after the euro lost ground because of the uncertainty about Greece.
On Thursday hopes for a breakthrough in the talks between Greece and its debtors pushed the JSE higher and the Top 40 index gained as much as 400 points (almost 1%), but the market gave everything back in late afternoon trade when it became known that the IMF negotiating team had left Brussels.
The result was that the Top 40 index closed 0.22% lower and the All-share index was 0.13% in the black.
The technical analysts of Imara SP Reid said in their daily Market Snapshot that the JSE's sudden turnaround on Friday afternoon indicates that there is still a great deal of selling pressure in the market.
The IMF said an agreement remained far off after a five-month stalemate with Greece's anti-austerity government, which faces the prospect of defaulting on huge debts at the end of the month. The European Union warned the Greek government to stop gambling with the possibility of default and a messy exit from the eurozone
Imara SP Reid said investors remained focused on US economic fundamentals and the possibility that US interest rates may rise enough to attract funds from emerging markets back to the US, but the market tone in the short term continued to be driven by the news flow from Greece.
Rising bond yields came to a halt on Thursday for the first time in two weeks as a fall-out in financial markets if Greece defaults became a bigger possibility.
Of the major shares on the JSE, Naspers [JSE:NPN] gained a solid 2.18% to R1 866.74 while Richemont [JSE:CFR] traded 0.71% stronger at R104.24.
Bidvest [JSE:BVT] was one of the busiest shares in terms of value after the company released a favourable trading update for the third quarter. The company said trading conditions in South Africa remained tough, but Bidvest's trading results are nevertheless ahead of those for the comparative period.
The solid momentum achieved by the food group in the first half of the year continued in the third quarter, particularly in the majority of the markets outside South Africa.
The share price was 0.12% higher at R305.15 and more than 1.5 million shares were sold for R464m.
Aveng [JSE:AEG], which lost 16% of its value on Thursday on news that its profit for the past year will decrease by half compared to the previous year, lost another 4.64% to R7.20.
READ: Aveng flags 50% profit drop, shares slump
In the resources sector Anglo American [JSE:AGL] was 2.23% stronger at R195.45 and BHP Billiton [JSE:BIL] gained 1.49% to R259.31.
