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Johannesburg - The JSE started the week on a lower note on Monday, after more news that the Chinese economy is slowing down raised new concerns about the state of the world economy.
The losses were however quite modest, as news that Chinese imports dropped sharply last month should have send shock waves particularly through the local resources market, as the world’s second largest economy is the biggest buyer of South African commodities.
Most indices have started the day much lower, but in early afternoon trade almost all those losses were eradicated, with the All share-index giving up 0.19% to 51 9001 points and the Top 40-index 0.21% to 45 646.
The biggest loser in morning trade was the Gold index which was 1.12% lower.
The dismal Chinese data, which was announced over the weekend, eclipsed a strong US jobs report. Asian shares dropped over a wide front and also send the Austrian dollar sliding, as Australia is also an important producer of commodities for China.
Chinese exports were in January 3.3% lower than a year ago while imports tumbled 19.9%, far worse than analysts had expected.
"The data shows that an economic slowdown is becoming a reality. If the government brings down its growth target next month, the markets will take it even more seriously," said Shuji Shirota, head of macro strategy at HSBC in Tokyo.
The poor trade figures took some of the shine off robust US payroll gains of 257 000 in January. Hourly wages also rebounded, increasing 12 cents last month for a 2.2% increase from a year earlier, the largest such gain since August.
The bad news about the Chinese trade data also ended a promising run by the oil price. The price of crude increased over the weekend on news that exploration for oil is slowing down, but it dropped almost half a percentage point on Monday on concerns about a drop in demand for oil as world growth continues to slow down.
A survey by US oil services firm Baker Hughes released on Friday showed the number of rigs drilling for oil in the United States fell by 83 to 1 140 in the week to February 6. The dip followed a cut of 94 rigs in the previous week.
Bloomberg News reported that the rig count was standing at its lowest level since December 2011. The drop, coupled with announcements of deep cuts in capital spending by major oil companies including BP and BG Group, suggests there will be tighter supplies in the future.
The market also shrugged off the news that Prime Minister Alexis Tsipras of Greece laid out plans to reverse austerity measures imposed on his country and vowed not to extend its current bailout deal. In his first major speech to parliament, Tsipras on Sunday set himself on a collision course with his European partners and rattled off a list of moves to reverse reforms.
This news caused European shares to drop, but the South African shares continued on their recovery path after the initial losses.
The best performer was the Resources index, which recovered from more than 1% down in early trade to almost unchanged in early afternoon trade.
This performance underpin the view by some analysts that resources stocks have dropped so much that they are beginning to offer value.
Top resources shares like Anglo American [JSE:AGL] and BHP Billiton [JSE:BIL] managed to stay in the black. Anglo was however only 0.31% stronger on R202.26 and BHP Billiton gained 0.57% to R266.00.
Sasol [JSE:SOL] was at one stage more than 2% lower and traded as low as R454.75 but in early afternoon trade it was only 1.58% lower on R460.18.
Kumba [JSE:KIO], which sell 60% of its production to China, gained 1.43% to R234.37.
The losses were however quite modest, as news that Chinese imports dropped sharply last month should have send shock waves particularly through the local resources market, as the world’s second largest economy is the biggest buyer of South African commodities.
Most indices have started the day much lower, but in early afternoon trade almost all those losses were eradicated, with the All share-index giving up 0.19% to 51 9001 points and the Top 40-index 0.21% to 45 646.
The biggest loser in morning trade was the Gold index which was 1.12% lower.
The dismal Chinese data, which was announced over the weekend, eclipsed a strong US jobs report. Asian shares dropped over a wide front and also send the Austrian dollar sliding, as Australia is also an important producer of commodities for China.
Chinese exports were in January 3.3% lower than a year ago while imports tumbled 19.9%, far worse than analysts had expected.
"The data shows that an economic slowdown is becoming a reality. If the government brings down its growth target next month, the markets will take it even more seriously," said Shuji Shirota, head of macro strategy at HSBC in Tokyo.
The poor trade figures took some of the shine off robust US payroll gains of 257 000 in January. Hourly wages also rebounded, increasing 12 cents last month for a 2.2% increase from a year earlier, the largest such gain since August.
The bad news about the Chinese trade data also ended a promising run by the oil price. The price of crude increased over the weekend on news that exploration for oil is slowing down, but it dropped almost half a percentage point on Monday on concerns about a drop in demand for oil as world growth continues to slow down.
A survey by US oil services firm Baker Hughes released on Friday showed the number of rigs drilling for oil in the United States fell by 83 to 1 140 in the week to February 6. The dip followed a cut of 94 rigs in the previous week.
Bloomberg News reported that the rig count was standing at its lowest level since December 2011. The drop, coupled with announcements of deep cuts in capital spending by major oil companies including BP and BG Group, suggests there will be tighter supplies in the future.
The market also shrugged off the news that Prime Minister Alexis Tsipras of Greece laid out plans to reverse austerity measures imposed on his country and vowed not to extend its current bailout deal. In his first major speech to parliament, Tsipras on Sunday set himself on a collision course with his European partners and rattled off a list of moves to reverse reforms.
This news caused European shares to drop, but the South African shares continued on their recovery path after the initial losses.
The best performer was the Resources index, which recovered from more than 1% down in early trade to almost unchanged in early afternoon trade.
This performance underpin the view by some analysts that resources stocks have dropped so much that they are beginning to offer value.
Top resources shares like Anglo American [JSE:AGL] and BHP Billiton [JSE:BIL] managed to stay in the black. Anglo was however only 0.31% stronger on R202.26 and BHP Billiton gained 0.57% to R266.00.
Sasol [JSE:SOL] was at one stage more than 2% lower and traded as low as R454.75 but in early afternoon trade it was only 1.58% lower on R460.18.
Kumba [JSE:KIO], which sell 60% of its production to China, gained 1.43% to R234.37.
