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Johannesburg - Share prices recovered on the JSE on Wednesday morning, but analysts warned that the morning’s recovery is just a technical rebound after the previous day’s relatively high selling volumes.
They warned that the current selling pressure on the JSE will probably continue after the technical rebound.
By midday on Wednesday the major indices were all lower than earlier in the day.
The All-share index was at that stage 0.46% higher at 51 313 points, after trading in a range between 51 141 and 51 470 points. The index lost 1.05% on Tuesday and edged below the 200-day moving day average.
The technical analysts of Imara SP Reid said in their daily Market Snapshot that the All-share index could well trade below the 50 000 level in the weeks ahead, after reaching a high of 55 1888 points less than two months ago.
The Top 40-index was 0.54% higher at midday but is also flirting with the 200-day average. The oversold banking sector recovered by only 0.40% by midday, and the Industrial index was at that stage 0.49% higher.
The Resources index was more volatile than the rest of the market and traded 0.90% higher by midday, but gold lost 1.19% after the previous day’s rebound.
Improved market sentiment also supported the rand against a dollar which was mostly unchanged over the past 48 hours. The local currency traded at R12.30 per dollar, an improvement of almost 1%.
Imara SP Reid said that market sentiment is still influenced by the overall yield environment. Yields that continue to edge upwards on expectations of higher US interest rates inhibit momentum in the share market.
The lack of progress in Greece debt negotiations also remains a feature of the trading backdrop and limited upside momentum. There were, however, expectations of an announcement after an EU official said an important breakthrough is imminent.
The shares of iron ore producers, which are under serious pressure, were among the best performers on Wednesday morning, with Kumba [JSE:KIO] 4.09% higher and Assore [JSE:ASR] 3.49% stronger. Kumba traded at R166.16 at midday on Wednesday, but is still 25.87% lower for the past 90 days and 53.3% for the past year.
Assore traded at R109.3 and was after Wednesday morning’s gain still 34.1% lower over the past three months and an astonishing 70.23% over the past year.
Engineering firm Murray & Roberts [JSE:MUR], which lost 46.96% over the past year, also picked up on Wednesday morning and traded 3.82% higher at R14.14. Its competitor Aveng [JSE:AEG], which is 63.75% lower than a year ago, traded 0.85% stronger at R8.35.
The two cellphone giants also gained on Wednesday morning. Vodacom [JSE:VOD] gained 2.37% to R130.25 but is still 17'8% lower over the past month. MTN [JSE:MTN], which lost 14.15% over the past month, traded 2.95% higher at R217.96.
Their fixed-line competitor Telkom [JSE:TKG], which announced that it would reduce its workforce by more than 7 000 people, lost 2.19% to R62.90.
Among the top shares Sasol [JSE:SOL] was the busiest in terms of value traded, and the share price increased by 1.33% to R431.18. Naspers [JSE:NPN] gained 1.21% to R431.18.
In the resources sector Anglo American [JSE:AGL] traded 1.96% higher at R191.87.
