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Johannesburg - The JSE recovered somewhat on Thursday morning, as analysts agree that the sharp drop over the past few days in the value of the rand, the prices of commodities and share prices due to the strong dollar was a little bit overdone.
By midday on Thursday all the major indices were higher than Wednesday’s close with the biggest recovery in the prices of resources and gold shares, which were the hardest hit in the correction at the beginning of the week.
By midday on Tuesday the All-share index was a solid 0.93% higher at 52 236 points and the Top 40-indenx gained 0.98% to 46 724. There were however signs that the market might lose steam during the rest of the day as various shares were trading below the highs achieved earlier in the day.
The Resources index was 2.56% stronger at midday while the Gold index improved by 0.93%. The Financial index gained 0.79% and the Industrial index 0.59%.
On Thursday morning Telkom [JSE:TKG] was a typical example of a share price recovering after sharp drops over the past few days, because investors think the share price has fallen too far.
The stock gained 3.69% to R74.50 after losing more than 18% of its value over the last week.
The share price reached an all-time high of R85 on March 3 this year as investors were discounting a possible takeover of the group by MTN [JSE:MTN]. When MTN announced that it would not be making an offer, the share price dropped to R69.85 on March 10.
Analysts say however that there is still value in the company’s turnaround strategy. Although the share price is 15.74% lower than last week’s high, it is still 133.28% higher for the year.
The beleaguered rand improved from R12.37 to the dollar to R12.16 on Thursday morning and commodity prices were also slightly lower. Gold improved by 0.32%, platinum by 0.45% and the oil price is again above $58 for a barrel of Brent crude.
READ: Oil prices higher in Asian trade
Anglo American [JSE:AGL] was one of the biggest winners on the JSE on Thursday morning when it gained 3.02% to R202.44. The share lost about 10% of its value over the last week. Its big competitor BHP Billiton [JSE:BIL] was 2.81% stronger at R267.05.
Two of the biggest platinum shares, Impala Platinum [JSE:IMP] and Lonmin [JSE:LON], which were both at 52-week lows over the previous few days, also recovered on Thursday morning. Lonmin’s gain of 3.87% was one of the biggest on the JSE and the share traded at R21.19. Impala was 1.21% stronger at R62.75.
In the iron ore sector Kumba [JSE:KIO], which lost 21.08% of its value over the last seven days, traded 2.19% stronger at R177.40. The share price is still 52.94% lower for the year.
The other iron ore producer, Assore [JSR:ASR], opened strongly and traded as high as R123.10 before the run lost steam; by midday it was again 0.31% lower at R117.32. The share is now 71.32% lower for the year.
Naspers [JSE:NPN], which reached another record on Wednesday, by midday rose 0.51% to a further high of R1 719.58. The share started off strongly and traded as high as R1 725.00.
In the financial sector Sanlam [JSE:SLM] flirted briefly with another high as it reached R78.94, just 1c higher than the current 52-week high. By midday the share, which is reaping the benefit of strong results last week, was only 0.67% higher at R78.52
