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Johannesburg - Share prices on the JSE bounced back on Thursday morning after three days of losses. Analysts said this was to be expected, as the profit-taking earlier in the week was overdone.
However, they warn that Thursday morning's recovery must be treated with circumspection, as the market is not completely out of the woods yet.
By Thursday midday all major indices on the JSE were up on the previous day, with the All-share index improving by 0.63% to 50 669 points and the Top 40 index by 0.72% to 45 708.
The best performers on Thursday were the Industrial index with a jump of 0.88% and the Resources index by 0.59%. The Gold index improved by 0.55%, while the Financial index was only marginally higher.
The research team of brokerage Imara SP Reid said in its daily market snapshot that share prices found technical support on Thursday morning and some bargain hunting took place, as could be expected. “Particularly yesterday’s selling when the all share index dropped with more than 1% was overdone.”
The researchers warned, however, that the JSE's stronger performance must be treated with circumspection. “Further advances are possible, but technical charts indicate that some sectors are clearly losing momentum for the first time in six or seven months.”
Much will depend on what happens in the American economy. Commentators worldwide were shocked on Wednesday when the US Commerce Department reported that first-quarter economic activity in the United States contracted much more than previously thought.
US gross domestic product fell at an annual pace of 2.9% in the first three months of 2014, much worse than the previous estimate of 1.0% and the sharpest decline in five years.
The American markets on Wall Street however ignored the news and all the major indices were moderately higher.
Analysts said the market essentially saw beyond the report, regarding it as backward-looking as more recent data shows growth picking up. The weak performance is blamed on the harsh winter which disrupted economic activity.
Imara SP Reid expected the US market to strengthen further on Thursday, but warned that a great deal will depend on significant economic data on continuing jobless claims, US personal income and most importantly US personal spending and real personal consumption to be announced just prior to the commencement of the trading day.
This will indicate if increased US growth is still in place.
Most of the major industrial shares were higher on Thursday morning, and big conglomerates like Remgro [JSE:REM] and Steinhoff International [JSE:SHF] reached new highs after losing momentum the day before.
Remgro was 1.10% higher at R227.88 and Steinhoff, one of the strong performers of the last few weeks, gained 2.61% to R57.80.
Naspers [JSE:NPN], one the biggest losers earlier this week after disappointing results, rose by 2.19% to R1 258.84. The share price is now less than 1% lower than the record set in March this year of R1 354.09, before a sharp correction in which it fell to below R1 000 a share.
SABMiller [JSE:SAB] improved by 1.31% to R609 and Richemont [JSE:CFR] was 0.56% stronger at R111.01, but British American Tobacco [JSE:BTI] lost 0.09% to R633.57.
In the resources sector Sasol [JSE:SOL] started off with a bang but gave up all gains by midday. The share price was 0.01% lower at R624.70 after reaching a high of R628.75. Anglo American [JSE:AGL] regained some of the ground it lost this week when it improved by 0.31% to R257.98.
- Fin24
However, they warn that Thursday morning's recovery must be treated with circumspection, as the market is not completely out of the woods yet.
By Thursday midday all major indices on the JSE were up on the previous day, with the All-share index improving by 0.63% to 50 669 points and the Top 40 index by 0.72% to 45 708.
The best performers on Thursday were the Industrial index with a jump of 0.88% and the Resources index by 0.59%. The Gold index improved by 0.55%, while the Financial index was only marginally higher.
The research team of brokerage Imara SP Reid said in its daily market snapshot that share prices found technical support on Thursday morning and some bargain hunting took place, as could be expected. “Particularly yesterday’s selling when the all share index dropped with more than 1% was overdone.”
The researchers warned, however, that the JSE's stronger performance must be treated with circumspection. “Further advances are possible, but technical charts indicate that some sectors are clearly losing momentum for the first time in six or seven months.”
Much will depend on what happens in the American economy. Commentators worldwide were shocked on Wednesday when the US Commerce Department reported that first-quarter economic activity in the United States contracted much more than previously thought.
US gross domestic product fell at an annual pace of 2.9% in the first three months of 2014, much worse than the previous estimate of 1.0% and the sharpest decline in five years.
The American markets on Wall Street however ignored the news and all the major indices were moderately higher.
Analysts said the market essentially saw beyond the report, regarding it as backward-looking as more recent data shows growth picking up. The weak performance is blamed on the harsh winter which disrupted economic activity.
Imara SP Reid expected the US market to strengthen further on Thursday, but warned that a great deal will depend on significant economic data on continuing jobless claims, US personal income and most importantly US personal spending and real personal consumption to be announced just prior to the commencement of the trading day.
This will indicate if increased US growth is still in place.
Most of the major industrial shares were higher on Thursday morning, and big conglomerates like Remgro [JSE:REM] and Steinhoff International [JSE:SHF] reached new highs after losing momentum the day before.
Remgro was 1.10% higher at R227.88 and Steinhoff, one of the strong performers of the last few weeks, gained 2.61% to R57.80.
Naspers [JSE:NPN], one the biggest losers earlier this week after disappointing results, rose by 2.19% to R1 258.84. The share price is now less than 1% lower than the record set in March this year of R1 354.09, before a sharp correction in which it fell to below R1 000 a share.
SABMiller [JSE:SAB] improved by 1.31% to R609 and Richemont [JSE:CFR] was 0.56% stronger at R111.01, but British American Tobacco [JSE:BTI] lost 0.09% to R633.57.
In the resources sector Sasol [JSE:SOL] started off with a bang but gave up all gains by midday. The share price was 0.01% lower at R624.70 after reaching a high of R628.75. Anglo American [JSE:AGL] regained some of the ground it lost this week when it improved by 0.31% to R257.98.
- Fin24
