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Johannesburg - The old saying that stock markets never go up in a straight line was particularly true of the JSE on Wednesday morning, when all the major indices were forced down by profit taking after the market made a strong run the previous few days.
And it was the frontrunners of the past few days, commodities and banking shares, which were the hardest hit.
There was no bad news that could affect the local and international sentiment, so Wednesday morning’s moderate losses were nothing more than the market taking a breather.
Contrary to the JSE, world markets have been strong with European markets close to a seven-year high. Asian markets were also stronger at a three-month high after Wall Street rallied on Tuesday night.
READ: Asian shares at 3-month peak, eyeing oil
Investor risk appetite is also on the increase, which resulted in the dollar having its worst day in more than a year on Tuesday before stabilising on Wednesday morning. The rand is also stronger, proving that foreign investors are increasingly looking to buy local assets with the cheap money made available by the European Central Bank’s stimulatory measures in the eurozone.
By midday the All-share index was 0.52% lower at 51 608 points, after closing just below the magical mark of 52 000 points on Tuesday evening. At that stage the Top 40-index was 0.57% softer at 45 450.
According to the intraday-graphs, the market stabilised towards midday and the indices moved mostly sideways in the latter part of Wednesday morning’s trade
Gold was at that stage 1.26% down and the Resources index lost 1.04%, while the Financial index traded 0.45% lower and the Industrial index was 0.42% down.
International market sentiment improved on the three-day rally in the oil price after news that oil producers are cutting down on capital expenditure in new production. Dealers are however still divided on whether the commodity has bottomed out after a plunge of nearly 60% since June.
The oil price therefore retreated on Wednesday morning and Brent crude for delivery in March eased 47 cents to $57.44 in mid-morning trade.
READ: Oil takes breather after 3-day rally
World markets are also encouraged by hopes a standoff over Greece's debt would be resolved after its new government softened calls for a write-down of the country’s debt.
Greek Finance Minister Yanis Varoufakis, who visited London, reassured private investors that he was not seeking a showdown with the European Union over a new debt agreement. He said the new left-wing government would spare privately-held bonds from losses, a source told Reuters.
Among the resources shares Anglo American [JSE:AGL] was the biggest loser, shedding 2.09% to R198.64. BHP Billiton [JSE:BIL], supported by the higher oil price, dropped only 0.33% to R267.11. Glencore [JSE:GLN] gained 0.39% to R46.09. Sasol [JSE:SOL] could also not maintain the run of the past few days and traded 2.07% lower at R464.60.
In the gold sector Gold Fields [JSE:GFI], which traded at a new high on Tuesday, lost 1.31% to R66.52 and AngloGold Ashanti [JSE:ANG] was 1.24% lower at R143.12.
In the financial sector, Standard Bank [JSE:SBK] dropped back by 0.98% to trade at R158.81.
And it was the frontrunners of the past few days, commodities and banking shares, which were the hardest hit.
There was no bad news that could affect the local and international sentiment, so Wednesday morning’s moderate losses were nothing more than the market taking a breather.
Contrary to the JSE, world markets have been strong with European markets close to a seven-year high. Asian markets were also stronger at a three-month high after Wall Street rallied on Tuesday night.
READ: Asian shares at 3-month peak, eyeing oil
Investor risk appetite is also on the increase, which resulted in the dollar having its worst day in more than a year on Tuesday before stabilising on Wednesday morning. The rand is also stronger, proving that foreign investors are increasingly looking to buy local assets with the cheap money made available by the European Central Bank’s stimulatory measures in the eurozone.
By midday the All-share index was 0.52% lower at 51 608 points, after closing just below the magical mark of 52 000 points on Tuesday evening. At that stage the Top 40-index was 0.57% softer at 45 450.
According to the intraday-graphs, the market stabilised towards midday and the indices moved mostly sideways in the latter part of Wednesday morning’s trade
Gold was at that stage 1.26% down and the Resources index lost 1.04%, while the Financial index traded 0.45% lower and the Industrial index was 0.42% down.
International market sentiment improved on the three-day rally in the oil price after news that oil producers are cutting down on capital expenditure in new production. Dealers are however still divided on whether the commodity has bottomed out after a plunge of nearly 60% since June.
The oil price therefore retreated on Wednesday morning and Brent crude for delivery in March eased 47 cents to $57.44 in mid-morning trade.
READ: Oil takes breather after 3-day rally
World markets are also encouraged by hopes a standoff over Greece's debt would be resolved after its new government softened calls for a write-down of the country’s debt.
Greek Finance Minister Yanis Varoufakis, who visited London, reassured private investors that he was not seeking a showdown with the European Union over a new debt agreement. He said the new left-wing government would spare privately-held bonds from losses, a source told Reuters.
Among the resources shares Anglo American [JSE:AGL] was the biggest loser, shedding 2.09% to R198.64. BHP Billiton [JSE:BIL], supported by the higher oil price, dropped only 0.33% to R267.11. Glencore [JSE:GLN] gained 0.39% to R46.09. Sasol [JSE:SOL] could also not maintain the run of the past few days and traded 2.07% lower at R464.60.
In the gold sector Gold Fields [JSE:GFI], which traded at a new high on Tuesday, lost 1.31% to R66.52 and AngloGold Ashanti [JSE:ANG] was 1.24% lower at R143.12.
In the financial sector, Standard Bank [JSE:SBK] dropped back by 0.98% to trade at R158.81.
