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Johannesburg - The JSE was again somewhat rudderless on Thursday, with most major indices moving sideways. By midday the All-share index was only 0.23% higher and the Top 40 index 0.33% stronger.
Analysts are however unsure what to expect in the afternoon as the market often loses ground in late afternoon trading. A typical example was Wednesday, when a further drop in resources shares in the afternoon pulled the market lower after a decent start.
But by midday on Thursday the Resources index was 1.35% higher, after losing more than 4% on Tuesday and more than 1.6% on Wednesday.
The Financial and Industrial indices continued with their gradual improvement. The Financial index was 0.24% higher, but the Industrial index was only 0.10% in the black. The European markets were not as strong as on Wednesday, which means the big double-listed shares delivered a mixed picture.
This volatility will probably continue for the rest of the week until Sunday’s referendum in Greece, when voters must decide if they are willing to accept strict austerity measures for a bailout package to relieve the country’s debt crisis.
Earlier on Wednesday markets were initially hopeful that a deal could be reached after Greek Prime Minister Alexis Tsipras wrote a conciliatory letter to creditors, asking for a new bailout that would accept many of their terms.
But on Wednesday afternoon he wrecked any prospect of repairing broken relations with European Union partners before Sunday’s referendum with a defiant speech on television, in which he urged voters to vote no to the creditors' requirements.
Greece was being "blackmailed", he said, quashing talk that he might delay the vote, call it off or urge Greeks to vote "Yes".
If a deal cannot be reached Greece may have to leave the eurozone, which could lead to the crisis spreading to other countries on the periphery.
Bank of England deputy governor Jon Cunliffe however said on Thursday there are no signs of that at the moment. “Financial markets are not showing there is contagion or spreading of those risks to the periphery,"
The local market, and in particular resources shares, will probably be more influenced by what is happening in China, where the stock market in Shanghai is continuing its free fall. The market in Shanghai sank another 3.00% on Thursday, extending a more than 5% plunge on Wednesday as investors brushed off the latest measures to temper a sell-off that has put the index into bear territory.
The health of the Chinese economy has a vital influence on commodity prices.
On Thursday morning the platinum price dropped another 0.47% to $1 078 and gold traded 0.37% lower at 1 164 per fine ounce. The Gold index dropped another 2.18% and is now trading below the 1 000 level, after reaching more than 1 500 as recently as January this year.
Harmony [JSE:HAR] lost another 2.75% and is now trading at a new 52-week low of R15.22. AnglogoldAshanti [JSE:ANG] was 2.44% softer at R103.30.
The platinum index lost more than 4% on Wednesday, but the shares recovered somewhat due to bargain-hunting. Anglo American Platinum [JSE:AMS] gained 0.90% and Impala Platinum [JSE:IMP] was 0.95% stronger at R51.99. Aquarius [JSE:AQP] was one the busiest shares on Thursday morning but traded unchanged at R130.
Among the major shares in the industrial sector Naspers [JSE:NPN] was 1% higher at R1 928.39 and British American Tobacco [JSE:BTI] gained 0.22% to R670.75, but SABMiller [JSE:SAB] lost 0.29% to R644.97.
In the banking sector FirstRand [JSE:FSR] was 0.91% stronger at R53.00. Capitec [JSE:CPI] was one of the busiest shares in term of value but lost 2.14% to R480.50.
In the resources sector BHP Billiton [JSE:BIL] gained a solid 2.79% to R246.31, but the share is still more than 8% lower over the past seven days.
