Share

No clear winner in JSE's battle of the bulls and bears

Johannesburg - Share prices on the JSE were far more subdued on Monday than last week, as investors realised the market might be oversold after the past few days' strong rally. Comments from the vice-chairperson of the Federal Reserve also created some doubt over last week’s euphoria over interest rate prospects.

As a result the All-share index at midday on Monday was only 0.04% higher at 53 319 points, while the Top 40 index gained only 0.05% to 47 834 points.

Markets worldwide rallied last week after the release of minutes from the US Federal Reserve's latest policy meeting showed board members could delay a rise in borrowing cots until 2016 because of worries about the global outlook. Wall Street experienced its biggest weekly gain of 2015.   

However, on Sunday Fed vice-chairperson Stanley Fischer said the bank expected to stick to its plan to tighten monetary policy by the end of the year, although he added that the plans were an "expectation, not a commitment". He added that "both the timing of the first rate increase and any subsequent adjustments to the federal funds rate target will depend critically on future developments in the economy".

While his comments, on the sidelines of the International Monetary Fund's annual meeting in Lima, do not indicate the Fed will lift rates, they show policymakers continue to consider it.

Analysts on Monday morning said markets are currently quite oversold after last week’s rally which could encourage profit-taking, but the fundamentals are looking much better than they have in a long time. There are also expectations of further relaxing in monetary policy by the European Central Bank and the People’s Bank of China.

In New York the major US indices are now above important psychological levels while the JSE's Top 40 index has comfortably broken through the important resistance level of 47 300 points.

Imara SP Reid said in its daily Market Snapshot on Monday that further marginal advances are possible, but recent strength has placed a number of indices in the domestic market in relatively overbought positions. Available strength can now be used as an opportunity to close out very short-term trading positions, which have enjoyed brisk upside.

However, by midday there was no clear winner in the battle between the bears and the bulls. The Industrial index which closed on a new all-time high on Friday was 0.21% lower, and the Financial index lost only 0.05%.

The star performer was again the Resources index, which responded to the weaker dollar and higher commodity prices. By midday the index was 1.6% higher while the volatile Gold index gained 4.6% in response to the gold price gain of 0.81% to $116 per ounce. Harmony [JSE:HAR] rose 12.39% to R12.39.

Platinum shares were also among the top performers, with the platinum price gaining more than $10 or 1.05% to $991/oz. Impala Platinum [JSE:IMP] was a solid 7.91% higher at R49.52 after gaining more than 19% in the previous seven days. Anglo American Platinum [JSE:AMS] was 2.90% stronger at R292.01 after gaining almost 15.6% over the previous week.

Lonmin’s [JSE:LON] spectacular recovery continued with another gain of 10.95% to R8.95. Before Monday Lonmin increased 112% over the previous seven days, but it is still 70.33% down over the past 90 days.

ArcelorMittal [JSE:ACL] traded another 4% higher at R13.00 after the share price gained 40.9% over the previous seven days.

Among the conglomerates in the commodity sector, BHP Billiton [JSE:BIL] was 1.37% higher at R224.85 but Glencore [JSE:GLN] was 0.77% softer at R25.89 after gaining almost 40% over the previous seven days. The company announced at the weekend that it will curtail zinc production in an effort to push up the price.

Most of the big shares which pushed the Industrial index to a new all-time high above the level of 70 000 points last week fell victim to profit-taking on Monday. British American Tobacco [JSE:BTI] at midday was 0.34% lower than Friday’s record close and traded at R765.43, while Richemont [JSE:CFR] was 0.28% softer at R116.01. This share was also on a high last week and gained 8.96% over the past seven days.

Naspers [JSE:NPN], which also gained more than 8% last week, lost 0.41% to R1 910.14 and Sasol [JSE:SOL] traded 0.99% softer at R455.61. Sasol gained more than 15% over the previous seven days in response to a higher oil price.

SABMiller [JSE:SAB] was 0.65% higher at R755.00 at midday after the company announced far-reaching restructuring in an effort to boost profit margins to fight off the bid by Anheuser-Busch InBev to take over the brewery.

SABMiller’s biggest South African shareholder, the PIC, said it supports the viewpoint that AB InBev’s latest offer considerably undervalues the brewer. SABMiller’s share price was however quite volatile and traded in a range between R742.00 and R763.00 in morning trade

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.89
+0.2%
Rand - Pound
23.82
+0.4%
Rand - Euro
20.37
+0.3%
Rand - Aus dollar
12.30
+0.3%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders