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Johannesburg - A sharp drop in the Sasol [JSE:SOL] share price has caused shares on the JSE to lose steam on Wednesday, after being in record territory in early trade.
The drop in Sasol’s price was caused by the news that the company will curtail its generous dividends as a result of the lower oil price.
On Tuesday the market also lost steam towards the end and the record breaking All-Share index closed only 0.03% lower than Monday’s new record level.
It seems that investors are now beginning to get worried about valuations and that the indices will tread water for a while.
READ: JSE investors cautious on Greece, oil news
Some of the major resource shares have risen up to 20% of their recent record lows, but there are now concerns whether the higher prices will be supported by earnings, as the weak commodity prices which pushed share prices down in the first place, did not change much in the past few weeks.
The earnings of platinum companies, which have reported results or trading statements so far, were significantly lower than a year ago, partly due to the prolonged strike in the industry in the first half of last year.
In early afternoon trade on Wednesday the All Share-index was 0.07% lower on 52 796, while the Top 40-index was unchanged at 46 716.
Of the major indices the resources index lost 0.35%, gold 1.58% and the industrial index 0.08, The financial index recovered after yesterday’s declines and was 0.48% higher.
The markets are still waiting to see what will happen with the financial crisis in Greece and with the oil price.
US stocks opened lower after the latest round of talks between Greece and the euro zone over restructuring its bailout ended abruptly on Monday without agreement.
