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Johannesburg - The damage caused on Tuesday on the JSE by the International Monetary Fund’s (IMF's) downgrade of South Africa’s growth prospects continued on Wednesday morning.
All the major indices were lower by midday on Wednesday and technical analysts are now warning that more residual selling pressure is possible if the markets do not rebound quickly and decisively.
The fact that international markets are also entering a period of uncertainty after the IMF downgraded its forecast for world economic growth as well did nothing to improve the JSE's mood.
By midday on Wednesday the All-share index was 0.66% lower at 48 390 points and the Top 40 index also lost 0.66% to trade at 43 213. The Financial index lost 0.60%, the Industrial index was 0.64% lower and the Resources index 0.74% weaker. Gold lost another 1.11%.
All the indices started the day much lower than on Tuesday, but then moved mostly sideways for the rest of the morning. By midday they were edging higher, limiting the losses.
Tuesday morning followed the same pattern until the IMF released its growth forecast shortly after 14:00, with share prices plummeting after that. It was the third time this year that the IMF downgraded its forecast for the South African economy and it now expects growth of only 1.3% compared to its previous forecast of 1.7%.
IMF forecasts for the global economy also caused havoc on world markets with substantial drops on Tuesday on Wall Street and in Europe, which continued in Europe on Wednesday morning.
The technical analysis published by Imara SP Reid in its daily Market Snapshot on Wednesday morning therefore did not paint a pretty picture and levels of below 42 000 (41 800) are now regarded as possible for the Top 40 index.
The analysts said failure of the Top 40 index to recover above the 44 000 level, with 44 500 as the first target, will lead to additional selling pressure.
Imara SP Reid said a trading bounce is possible, such as seen at the end of last week and on Monday morning, but on balance investors now need patience and circumspection.
Indications are that the markets on Wall Street will also be more volatile than recently, when the major indices reached one record after the other.
The technical analysts said Monday's losses on US indices were substantial, and the Standard & Poor’s index broke downwards out of its narrow bull market band. This does not necessarily mean the market’s upward momentum is completely lost, but there will be more volatility.
The market got its first taste of the effects of the four-week strike in the metals and engineering industry by the National Union of Metalworkers of SA, and investors did not like it. Altron’s share price dropped by 8.28% after the company announced a 12.7% fall in headline earnings for the first half of the year.
This was mainly due to the strike, which cost the company R82m at the earnings before interest, tax, depreciation and amortisation (Ebitda) level.
By midday Altron [JSE:AEN] was trading at a 52-week low after reaching a new 52-week high as recently as June this year, when the share traded at R29.59.
Murray & Roberts Holdings [JSE:MUR] also at one stage traded at a 52-week low when the share price dropped to R22.50, but it recovered later and by midday was only 1.13% lower at R23.68.
- Fin24
All the major indices were lower by midday on Wednesday and technical analysts are now warning that more residual selling pressure is possible if the markets do not rebound quickly and decisively.
The fact that international markets are also entering a period of uncertainty after the IMF downgraded its forecast for world economic growth as well did nothing to improve the JSE's mood.
By midday on Wednesday the All-share index was 0.66% lower at 48 390 points and the Top 40 index also lost 0.66% to trade at 43 213. The Financial index lost 0.60%, the Industrial index was 0.64% lower and the Resources index 0.74% weaker. Gold lost another 1.11%.
All the indices started the day much lower than on Tuesday, but then moved mostly sideways for the rest of the morning. By midday they were edging higher, limiting the losses.
Tuesday morning followed the same pattern until the IMF released its growth forecast shortly after 14:00, with share prices plummeting after that. It was the third time this year that the IMF downgraded its forecast for the South African economy and it now expects growth of only 1.3% compared to its previous forecast of 1.7%.
IMF forecasts for the global economy also caused havoc on world markets with substantial drops on Tuesday on Wall Street and in Europe, which continued in Europe on Wednesday morning.
The technical analysis published by Imara SP Reid in its daily Market Snapshot on Wednesday morning therefore did not paint a pretty picture and levels of below 42 000 (41 800) are now regarded as possible for the Top 40 index.
The analysts said failure of the Top 40 index to recover above the 44 000 level, with 44 500 as the first target, will lead to additional selling pressure.
Imara SP Reid said a trading bounce is possible, such as seen at the end of last week and on Monday morning, but on balance investors now need patience and circumspection.
Indications are that the markets on Wall Street will also be more volatile than recently, when the major indices reached one record after the other.
The technical analysts said Monday's losses on US indices were substantial, and the Standard & Poor’s index broke downwards out of its narrow bull market band. This does not necessarily mean the market’s upward momentum is completely lost, but there will be more volatility.
The market got its first taste of the effects of the four-week strike in the metals and engineering industry by the National Union of Metalworkers of SA, and investors did not like it. Altron’s share price dropped by 8.28% after the company announced a 12.7% fall in headline earnings for the first half of the year.
This was mainly due to the strike, which cost the company R82m at the earnings before interest, tax, depreciation and amortisation (Ebitda) level.
By midday Altron [JSE:AEN] was trading at a 52-week low after reaching a new 52-week high as recently as June this year, when the share traded at R29.59.
Murray & Roberts Holdings [JSE:MUR] also at one stage traded at a 52-week low when the share price dropped to R22.50, but it recovered later and by midday was only 1.13% lower at R23.68.
- Fin24
