Publications
Partners
It seems investors could not resist the temptation to do some bargain-hunting after Monday’s sharp drop, when the Resources index shed more than 6% and some blue chip commodity shares lost up to 26% of their value.
The major indices started lower on global growth concerns, after more bad news from China led to sharp losses on Wall Street on Monday and even bigger losses on the Asian markets on Tuesday.
READ: Asian shares skid on China anxiety
Most of the important indices were however marginally higher by midday as investors piled into shares such as Glencore [JSE:GLN], which lost more than 26% of its value on Monday. By midday the beleaguered commodity group traded more than 3% higher.
At that stage the All-share index was only 013% higher at 49 557 points while the Top 40 index was 0.26% higher at 44 357 points. The Financial index gained 0.28% and the Industrial index 0.23%, while the Resources index was only 0.01% softer.
Some share prices, particularly among the double-listed shares, were supported by the weak rand which crumbled to a new record low against the dollar on Tuesday as concerns about China's economy sank commodity-linked currencies.
READ: Rand slumps as China woes weigh
The rand traded as low as R14.13 to a dollar at one stage but recovered by midday on Tuesday to R14.01 after news that Chinese industrial firms suffered their biggest profit drop in four years, rattling investor confidence in commodity-linked assets.
Asian shares hit three-and-a-half year lows, with the Nikkei Index losing 4% and the Hang Seng Index in Hong Kong 2.97% lower.
But despite all this, investors piled into Glencore and by midday the share gained 3.44% to R15.94. Anglo American [JSRE:AGL], which was 10% softer on Monday, was also more stable and traded only 0.35% lower at R118.23.
SABMiller [JSE:SAB] was however softer after Monday’s strong run of more than 4% and at midday was 0.57% down at R772.25. Naspers [JSE:NPN] gained 2.14% to R1 698.62 despite the softer Asian markets, but Sasol [JSE:SOL] shed 0.24% to R380.51. Sasol has lost more than 10% over the past week due to pressure on the oil price.
The other big news of the day was that platinum fell below $900 an ounce on Tuesday for the first time since January 2009 on fears that the Volkswagen emissions scandal would reduce auto sector demand.
READ: Platinum plummets below $900 on VW scandal
Spot platinum slid to $899.80/oz before recovering to $912 by midday. The metal, which has fallen for seven sessions out of eight, has been hurt by news of Volkswagen's falsification of US vehicle emission tests as investors believe it could affect demand for diesel cars. Platinum is widely used as a component in emissions-cleaning catalytic converters for diesel cars.
Platinum shares were however remarkably resilient and Anglo American Platinum [JSE:AMS] lost only 0.26% to R236.14. Impala Platinum [JSE:IMP] was 0.54% lower at R38.40 by midday.
Capitec [JSE:CPI] was at one stage more than 3% higher on news that the banking group increased earnings by 25% for the six months to end-August, on the back of the bank’s highest growth in active clients in three years. By midday it traded 2.17% higher at R487.95 after reaching a high of R494.50 in earlier trade.
Telkom [JSE:TKG], which gained more than 11% over the past seven days on speculation that it is interested in acquiring Cell C, became the victim of some profit-taking and lost 1.99% to R65.67.
