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Johannesburg - The uncertainty that is pushing the rand towards its lowest level in five years has not had a major effect on the JSE yet.
The market is however treading water at the moment as investors are waiting to see what will happen with the showdown between Greece and the European Union, which could lead to yet another international financial crisis.
READ: Greece, eurozone fail to agree on debt
Some commentators like to link the rand’s weakness to the power crisis and uncertainty on what President Jacob Zuma will say in the State of the Nation of address on Thursday evening, but it is doubtful that these factors will play a role.
READ: Rand softens ahead of Zuma speech
The value of the rand is the function of the demand for the currency and currently international investors are risk averse because of the uncertainty over Greece, therefore all emerging market currencies are under pressure.
At this stage it does not look as if international investors, who have pushed the JSE close to record levels in the past weeks, are leaving the market in droves, although they might spend some time on the sidelines. The All-share index has been hovering just above the level of 52 000 points for the last three days, and Thursday morning was no exception.
By midday the All-share index was unchanged at 52 067 and the Top 40-index only 0.02% higher at 45 889 points.
Markets all over the world are waiting see what will happen later on Thursday at the European Union summit in Brussels after discussions on the extension of Greece’s debt did not deliver anything.
Jeroen Dijsselbloem, head of the Eurogroup of eurozone ministers, said six hours of talks produced no deal on an extension of Athens' EU-IMF rescue programme worth €240bn.
Greece's bailout is due to expire at the end of February and failure to agree an extension would see the country default on its giant debts, almost inevitably meaning that it would crash out of the eurozone.
Prime Minister Alexis Tsipras led the hard-left Syriza party to victory in elections last month, vowing to bring an end to austerity measures imposed under the bailout.
The rand recovered somewhat on Thursday morning to R11.76 to the dollar after reaching a five-year low of R11.89 on Wednesday night. A weaker rand is good news for commodity shares and the best performer on Thursday morning was the Resources index, which traded 0.74% higher by midday after being more than 1% stronger earlier in the day.
The share prices of the top resources companies all traded substantially higher, which supports the viewpoint that investors are beginning to see value in these stocks.
Anglo American [JSE:AGL] strengthened by 2.08% to R206.90 and BHP Billiton [JSE:BIL] was 2% higher at R269.91. Glencore [JSE:GLN] was 2.08% stronger at R49.66 after the company announced on Wednesday that it plans to unbundle its share in Lonmin [JSE:LON].
Sasol [JSE:SOL] was only 0.71% higher at R460.40. The company will benefit from a weaker rand, but the oil price is again on a downward trajectory and Brent traded below $56 on Thursday morning.
