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Johannesburg - The JSE took a breather early on Friday morning as investors realised that the sell-offs this week could be slightly overdone, but the positive sentiment did not last long.
At midday all the important indices were lower again after a positive start, when profit-taking in the resources sector forced the market lower.
At midday the all share index was 178.24 points or 0.391% lower on 45 000 and the Top 40 index 186.56 points or 0.46% lower on 40 778.
The resources sector, which was supported by the weaker rand recently, was 493.34 points or 0.91% lower at 53 937.
Imara SP Reid said in a note early this morning that the resources shares are now relatively overbought and investors are advised to trim back short trading positions. Technical analysis indicated that further profit taking into the recent strength is possible.
Anglo American, one of the stars in the sector recently, traded 0.68% lower at R262.30.
But some of the rate sensitive stocks recovered somewhat, after the Reserve Bank governor Gill Marcus made it clear that the bank’s accommodating stance towards the economy is still continuing, indicating that further hikes in interest rates is not a certainty. These stocks were under pressure after the Reserve bank raised interest rates on Wednesday with 50 basis points.
Amongst the retail shares Pick 'n Pay traded 1.22% higher on R20.75 and Clicks improved with 2.04% to R56.43. Shoprite’s share price was 0.77% higher on R143.10
Amongst the banks Standard Bank improved 1.04% to R116.21 and Nedbank was unchanged at R98.
Stock prices was initially supported by stock prices in New York, which closed higher on the strength of solid news that the American economy grew by 3.2% in the fourth quarter, higher than the 3.0% predicted by analysts. Facebook and Google also announced sharp rises in revenue which support technology stocks.
The sharp sell-off in emerging markets also appeared to subside as the Russian rouble, the Turkish lira and South American currencies recovered, when the authorities in those countries vowed to take necessary measure to stabilise their markets.
The rand traded stronger than yesterday when the currency reached a new five year low of R11.39 against the dollar. At midday the currency was trading at R11.26/$.
Adcock Ingram traded 3.27% lower at R67.70 after yesterday’s activity when a record of 39 million shares was sold. Bidvest confirmed that it was the buyer to strengthen its arm to block the takeover bid by CFR Pharmaceuticals of Chile.
