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Johannesburg - Share prices softened on the JSE on Friday morning after Thursday’s strong recovery to the losses earlier this week.
The major indices started the day moving mostly sideways, but the momentum on the intraday graphs became more negative as the day unfolded.
Analysts ascribed the weaker performance to the end of the second quarter when major unit trusts balance their portfolios, as well as to another sluggish performance on Wall St after disappointing economic news.
The news that US consumer spending, which accounts for more than two-thirds of US economic activity, rose a mere 0.2% in May after a flat April, raised the possibility that growth projections for the American economy will have to be revised downwards.
By midday on Friday the All-share index was 0.25% lower at 50 635 points, while the Top 40 index lost 0.29% to 45 652.
However, technical analysts said on Friday morning that the positive momentum on the medium term on the JSE is not broken, despite some indications of bigger volatility over the short term.
Amongst the important indices the Industrial index was 0.29% softer with all the heavyweights such as Naspers [JSE:NPN], SABMiller [JSE:SAB], Richemont [JSE:CFR] and British American Tobacco [JSE:BTI] marginally lower.
Naspers was the biggest loser with a drop of 1.09% to R1 250.90 and Richemont was 0.95% weaker on R109.98. SAB lost 0.68% to R603.95 and BAT 0.42% to R628.53.
These shares are the favourites among overseas investors chasing higher yields in South Africa, as the general expectancy is that interest rates in developing markets will remain low for a long time.
However, comments from a Federal Reserve official on Thursday raised the possibility that interest rates might well increase sooner than expected.
Technical analysts of Imara SP Reid said in their daily market snapshot it is important to note that the Fed is perhaps adopting a slightly more hawkish tone, which the market has discounted for the moment.
The news that the South African economy faced another crippling strike in the steel and engineering industries also had an influence on the mood on the JSE.
The rand weakened considerably on the news, but the weaker rand did not support the big double-listed shares with overseas interests as it normally does.
Resources stocks also did not benefit from the weaker rand and the resources index was 0.17% lower on Wednesday.
Technical analysis shows that the resources index is close to important resistance levels and investors are, therefore, taking a breather.
Anglo American [JSE:AGL] was 0.30% lower on R257.76.
One share that bucked the trend was Anglo American Platinum [JSE:AMS], which gained 1.62% to R464.75 after losing ground the previous few days.
The Financial index was 0.38% lower. One exception was African Bank [JSE:ABL], which was not only the busiest share of the day in terms of volume, but one of best performers of the day.
The share, which was still trading at a 52-week low on Thursday, strengthened by 5.87% after more than 7.5 million shares were traded on Friday morning.
- Fin24
The major indices started the day moving mostly sideways, but the momentum on the intraday graphs became more negative as the day unfolded.
Analysts ascribed the weaker performance to the end of the second quarter when major unit trusts balance their portfolios, as well as to another sluggish performance on Wall St after disappointing economic news.
The news that US consumer spending, which accounts for more than two-thirds of US economic activity, rose a mere 0.2% in May after a flat April, raised the possibility that growth projections for the American economy will have to be revised downwards.
By midday on Friday the All-share index was 0.25% lower at 50 635 points, while the Top 40 index lost 0.29% to 45 652.
However, technical analysts said on Friday morning that the positive momentum on the medium term on the JSE is not broken, despite some indications of bigger volatility over the short term.
Amongst the important indices the Industrial index was 0.29% softer with all the heavyweights such as Naspers [JSE:NPN], SABMiller [JSE:SAB], Richemont [JSE:CFR] and British American Tobacco [JSE:BTI] marginally lower.
Naspers was the biggest loser with a drop of 1.09% to R1 250.90 and Richemont was 0.95% weaker on R109.98. SAB lost 0.68% to R603.95 and BAT 0.42% to R628.53.
These shares are the favourites among overseas investors chasing higher yields in South Africa, as the general expectancy is that interest rates in developing markets will remain low for a long time.
However, comments from a Federal Reserve official on Thursday raised the possibility that interest rates might well increase sooner than expected.
Technical analysts of Imara SP Reid said in their daily market snapshot it is important to note that the Fed is perhaps adopting a slightly more hawkish tone, which the market has discounted for the moment.
The news that the South African economy faced another crippling strike in the steel and engineering industries also had an influence on the mood on the JSE.
The rand weakened considerably on the news, but the weaker rand did not support the big double-listed shares with overseas interests as it normally does.
Resources stocks also did not benefit from the weaker rand and the resources index was 0.17% lower on Wednesday.
Technical analysis shows that the resources index is close to important resistance levels and investors are, therefore, taking a breather.
Anglo American [JSE:AGL] was 0.30% lower on R257.76.
One share that bucked the trend was Anglo American Platinum [JSE:AMS], which gained 1.62% to R464.75 after losing ground the previous few days.
The Financial index was 0.38% lower. One exception was African Bank [JSE:ABL], which was not only the busiest share of the day in terms of volume, but one of best performers of the day.
The share, which was still trading at a 52-week low on Thursday, strengthened by 5.87% after more than 7.5 million shares were traded on Friday morning.
- Fin24
