Publications
Partners
Johannesburg - Hopes that Wednesday’s exceptional losses on the JSE represented a “selling climax” did not last long on Thursday.
The technical recovery analysts predicted after Wednesday’s heavy selling lasted only for about an hour on Thursday morning, after which the market was moving sharply downwards again.
The Industrial index in particular, now trading way below its 200-day moving average, staged a recovery on Thursday morning before losing ground again, representing a swing of almost 2%.
It seems the JSE is now also caught up in the global concern about the world’s woeful economic prospects.
The big double-listed companies on the JSE, which represent the major part of the market’s capitalisation, have interests worldwide and they are as vulnerable to international economic conditions as companies in the developed world.
By midday on Thursday the All-share index was 0.85% lower at 46 276 and the Top 40 index lost 0.87% to 41 209. The market is now just more than 10% lower than its previous highs in July; conditions are regarded as a bear market when the market falls more than 15%.
The Industrial index which at one stage on Thursday morning was almost 1% higher, was 1.07% weaker at midday and the Financial index lost 1.04%, while Resources slipped 0.73%.
The technical analysts of Imara SP Reid said in their daily Market Snapshot that selling pressure is severe, as indicated by high volumes.
Wednesday turnover was a massive R23bn. This indicated the possibility of a very short-term bottom to the selling, but nobody expected the bottom to be over so quickly.
The bad news is that the Top 40 index traded above the important support level of 41 800 for only one day before going decisively downwards again.
The fact remains that the Top 40 index is heavily oversold. “It is currently at its most oversold level in more than eight years according to 22 day rate of exchange data,” the technical analysts of Imara SP Reid said.
The mood on the JSE is also influenced by world markets, which were lower worldwide on Thursday following Wednesday night's sell-off on Wall Street.
READ: US, Euro stocks tank on growth, Ebola fears
Disappointing data sparked fears that the US economy, regarded as a beacon of light in a world of economic woes, will be dragged down by the poor growth in Europe, China and Japan. American companies earn a major part of their earnings in these regions.
Wall Street opened sharply lower after the commerce department reported US retail sales dropped 0.3% in September, the first decline in seven months.
US producer prices fell in September for the first time since August 2013 pulled lower by falling energy and food prices, the labour department said in a report offering fresh evidence of weak inflationary pressures in the modestly growing economy.
Fears about the possible effect of the Ebola virus on the world economy are also surfacing.
The only positive news is that the dollar drop after the weak US data appeared to suggest the Federal Reserve could keep its near-zero interest rate policy longer than the expected mid-2015 timeline for a rate hike. This will be good for commodity prices.
Trading was brisk again on Thursday, with Naspers [JSE:NPN] the most active share with 5 772 deals already done by midday. At this time the share price was virtually unchanged at R1 170.00, but at one stage it was almost 2.5% higher at R1 198.99. Naspers has now lost 10.2% over the last week and 16.4% over the last month.
There were 5 472 deals in Sasol [JSE:SOL] shares with the share price declining by another 1.56% to R536.53, after trading at a high of R553.20 earlier in the day. Sasol is now 6.4% lower over the last week and 13.1% over the last month.
- Fin24
The technical recovery analysts predicted after Wednesday’s heavy selling lasted only for about an hour on Thursday morning, after which the market was moving sharply downwards again.
The Industrial index in particular, now trading way below its 200-day moving average, staged a recovery on Thursday morning before losing ground again, representing a swing of almost 2%.
It seems the JSE is now also caught up in the global concern about the world’s woeful economic prospects.
The big double-listed companies on the JSE, which represent the major part of the market’s capitalisation, have interests worldwide and they are as vulnerable to international economic conditions as companies in the developed world.
By midday on Thursday the All-share index was 0.85% lower at 46 276 and the Top 40 index lost 0.87% to 41 209. The market is now just more than 10% lower than its previous highs in July; conditions are regarded as a bear market when the market falls more than 15%.
The Industrial index which at one stage on Thursday morning was almost 1% higher, was 1.07% weaker at midday and the Financial index lost 1.04%, while Resources slipped 0.73%.
The technical analysts of Imara SP Reid said in their daily Market Snapshot that selling pressure is severe, as indicated by high volumes.
Wednesday turnover was a massive R23bn. This indicated the possibility of a very short-term bottom to the selling, but nobody expected the bottom to be over so quickly.
The bad news is that the Top 40 index traded above the important support level of 41 800 for only one day before going decisively downwards again.
The fact remains that the Top 40 index is heavily oversold. “It is currently at its most oversold level in more than eight years according to 22 day rate of exchange data,” the technical analysts of Imara SP Reid said.
The mood on the JSE is also influenced by world markets, which were lower worldwide on Thursday following Wednesday night's sell-off on Wall Street.
READ: US, Euro stocks tank on growth, Ebola fears
Disappointing data sparked fears that the US economy, regarded as a beacon of light in a world of economic woes, will be dragged down by the poor growth in Europe, China and Japan. American companies earn a major part of their earnings in these regions.
Wall Street opened sharply lower after the commerce department reported US retail sales dropped 0.3% in September, the first decline in seven months.
US producer prices fell in September for the first time since August 2013 pulled lower by falling energy and food prices, the labour department said in a report offering fresh evidence of weak inflationary pressures in the modestly growing economy.
Fears about the possible effect of the Ebola virus on the world economy are also surfacing.
The only positive news is that the dollar drop after the weak US data appeared to suggest the Federal Reserve could keep its near-zero interest rate policy longer than the expected mid-2015 timeline for a rate hike. This will be good for commodity prices.
Trading was brisk again on Thursday, with Naspers [JSE:NPN] the most active share with 5 772 deals already done by midday. At this time the share price was virtually unchanged at R1 170.00, but at one stage it was almost 2.5% higher at R1 198.99. Naspers has now lost 10.2% over the last week and 16.4% over the last month.
There were 5 472 deals in Sasol [JSE:SOL] shares with the share price declining by another 1.56% to R536.53, after trading at a high of R553.20 earlier in the day. Sasol is now 6.4% lower over the last week and 13.1% over the last month.
- Fin24
