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Johannesburg - The share price of Sasol [JSE:SOL], which lost more than 30% over the last month, started recovering on Monday morning.
The surge in Sasol stocks was started by the oil price, which recovered somewhat after a strong drop on Friday afternoon sent markets in a tailspin worldwide.
READ: Oil hits lowest in more than 5 years
It also helped the JSE recover some of the sharp losses from early in the trading day, when the market fell more than 1.5% in reaction to Friday's sharp drop on Wall Street when the Dow Jones lost more than 300 points.
The price of Brent dropped on Friday to nearly $60 per barrel and the price of US crude to below $58 when the Organisation of Petroleum Exporting Countries released new estimates of the future demand for oil which was much lower than previous ones. This caused a global tumble in stock markets.
However, on Monday morning the price of Brent recovered to above $52.50 on expectations of stronger manufacturing data later in the week and this pushed stock markets higher too.
By Monday midday the JSE had not recovered all of its earlier losses and the All-share was still 0.47% lower at 47 817. The Top 40 index was still 0.50% weaker than on Friday and the index is now far below important resistance levels which must be breached for the markets to surge again.
At that stage the resources indices were just in the black after some of the other commodity stocks that suffered heavy losses the last few week turned around. Sasol, which lost more than 9% last week, was by midday 1.82% higher at R399.93. Assore [JSE:ASR] was 2.11% higher at R143.03 after losing 11% last week, but the share price was at one stage more than 3% stronger.
BHP Billiton [JSE:BIL], also a major oil producer, started the day more than 1% lower, but recovered just enough to be in the black by mid-morning. However, at midday it was again 1.14% lower at R143.03. The end of oil price woes is not in sight and analysts warned that the price may go as low as $50 per barrel.
This would put many new energy projects at risk and will also have negative implications for the institutions which are financing them. Analysts also warn that the lower oil price will not increase oil consumption as it is doubtful if crude will win back the market share gained by renewable energy over the last few years. A lower oil price and lower energy costs can be a boost for the world economy but the advantages may be offset by the damage done to the economies of oil-producing countries.
The news that two major credit rating agencies confirmed the outlook for South Africa's credit rating as stable did not do much to improve market sentiment.
READ: Rand firms after Fitch maintains rating
At midday the Financial index was 0.43% lower and the Industrial index lost 0.70%. The rand traded at R11.650 to the dollar.
Barclays Africa [JSE:BGA] was the biggest loser among the banks and dropped 1.27% to R170.93. FirstRand [JSE:FSR] was 0.50% softer at R47.47 and Nedbank [JSE:NED] traded 0.48% weaker at R230.88.
In the industrial sector SABMiller [JSE:SAB] lost 3.47% to R593.67 and Naspers [JSE:NPN] 1.46% to R1 345.88.
The surge in Sasol stocks was started by the oil price, which recovered somewhat after a strong drop on Friday afternoon sent markets in a tailspin worldwide.
READ: Oil hits lowest in more than 5 years
It also helped the JSE recover some of the sharp losses from early in the trading day, when the market fell more than 1.5% in reaction to Friday's sharp drop on Wall Street when the Dow Jones lost more than 300 points.
The price of Brent dropped on Friday to nearly $60 per barrel and the price of US crude to below $58 when the Organisation of Petroleum Exporting Countries released new estimates of the future demand for oil which was much lower than previous ones. This caused a global tumble in stock markets.
However, on Monday morning the price of Brent recovered to above $52.50 on expectations of stronger manufacturing data later in the week and this pushed stock markets higher too.
By Monday midday the JSE had not recovered all of its earlier losses and the All-share was still 0.47% lower at 47 817. The Top 40 index was still 0.50% weaker than on Friday and the index is now far below important resistance levels which must be breached for the markets to surge again.
At that stage the resources indices were just in the black after some of the other commodity stocks that suffered heavy losses the last few week turned around. Sasol, which lost more than 9% last week, was by midday 1.82% higher at R399.93. Assore [JSE:ASR] was 2.11% higher at R143.03 after losing 11% last week, but the share price was at one stage more than 3% stronger.
BHP Billiton [JSE:BIL], also a major oil producer, started the day more than 1% lower, but recovered just enough to be in the black by mid-morning. However, at midday it was again 1.14% lower at R143.03. The end of oil price woes is not in sight and analysts warned that the price may go as low as $50 per barrel.
This would put many new energy projects at risk and will also have negative implications for the institutions which are financing them. Analysts also warn that the lower oil price will not increase oil consumption as it is doubtful if crude will win back the market share gained by renewable energy over the last few years. A lower oil price and lower energy costs can be a boost for the world economy but the advantages may be offset by the damage done to the economies of oil-producing countries.
The news that two major credit rating agencies confirmed the outlook for South Africa's credit rating as stable did not do much to improve market sentiment.
READ: Rand firms after Fitch maintains rating
At midday the Financial index was 0.43% lower and the Industrial index lost 0.70%. The rand traded at R11.650 to the dollar.
Barclays Africa [JSE:BGA] was the biggest loser among the banks and dropped 1.27% to R170.93. FirstRand [JSE:FSR] was 0.50% softer at R47.47 and Nedbank [JSE:NED] traded 0.48% weaker at R230.88.
In the industrial sector SABMiller [JSE:SAB] lost 3.47% to R593.67 and Naspers [JSE:NPN] 1.46% to R1 345.88.
