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Johannesburg - Share prices on the JSE were modestly lower on Friday, in response to softer European markets after the terrorist attack in France on Thursday night.
The local market opened sharply lower, but recovered during the course of the morning and at mid-morning the intraday graph was pointing upwards again.
There was some profit-taking too with resources shares the biggest losers after a strong run this week, despite better-than-expected economic data from China.
By mid-morning the Industrial index was the only JSE index in the black, albeit only marginally, with resources and financial shares trading lower.
The All-share index, which gained almost 4% over the seven days before Friday’s trade, at mid-morning was only 0.17% lower at 52 650 points while the Top 40 index lost 0.10% to 46 266 points.
At that stage the Resources index was 0.62% softer while the Financial index had lost 0.68%, with the Industrial index - which includes most of the big dual-listed shares - only 0.19% stronger.
The underlying sentiment on global markets is still buoyant, with the Dow Jones and S&P 500 indices on Wall Street closing on new records. Asian shares also extended their gains to nine-month highs on Friday, on track for a solid weekly rise as better-than-expected economic data from China lifted risk sentiment that was already buoyant after the record highs on Wall Street.
On the European market, the shares of travel and leisure companies dropped sharply after an attack in the French city of Nice. A gunman at the wheel of a heavy truck ploughed into a crowd celebrating Bastille Day late on Thursday, killing at least 84 people and injuring many more.
READ: Travel shares dive after France terror attack
European investors were also caught off-guard after the Bank of England decided to keep interest rates unchanged but promised some stimulus measures later on.
China's economy grew 6.7% in the second quarter from a year earlier, steady from the first quarter and slightly better than expected. Industrial output and retail sales also beat forecasts, which helped alleviate fears of slowing momentum, with growth in fixed-asset investments exceeding market estimates.
That raised expectations that Chinese authorities will have to introduce more stimulus measures to prevent the economy from losing momentum.
This is normally good news for commodities, but the sector’s momentum was stopped by a stronger dollar, which improved to a three-week high against the yen after gaining more than 5% for the week against the Japanese currency, and some profit-taking.
Among the top resources shares Anglo American [JSE:AGL] traded 0.91% lower at R158.66 while BHP Billiton [JSE:BIL] gave up 0.88% to R188.50. Glencore [JSE:GLN] was however 056% higher at R35.70. Kumba [JSE:KIO], the high flyer of the last few weeks, traded 2% softer at R130.88.
Luxury goods company Richemont [JSE:CFR] attracted much attention as the shares of European luxury goods firms fell sharply on Friday, with Swatch slumping 13% to its lowest in six-and-a-half years. The world's biggest watchmaker warned its first-half profit would drop by 50% to 60%.
Swiss watchmakers are grappling with weak demand as fewer Chinese tourists shop for timepieces in Hong Kong and Europe, and as a strong Swiss franc pushes up the production cost for Swiss-made watches.
Richemont was at one stage on Friday more than 5% lower at R82.38, but the share subsequently recovered and by mid-morning was 3.15% softer at R83.96. Richemont lost more than 18% over the past three months and recently traded at a 52-week low of R82.40.
SABMiller [JSE:SAB] gained 1.44% to R844.57, but Naspers [JSE:NPN] lost 0.27% to R2 214.07.
MTN [JSE:MTN] was the busiest share on the JSE in terms of volume and value, with more than 384 million shares being traded for more than R2.7bn.
Investors reacted to reports than South Africa will start the process of selling broadband spectrum after a delay of several years, which is a significant step towards introducing high-speed internet. Telecommunications companies such as MTN and Vodacom [JSE:VOD] will be invited to apply for the spectrum.
Wireless operators have been clamouring for more spectrum to expand broadband as stiff competition and tight regulation hamper growth in phone services.
By mid-morning MTN was 0.92% higher and Vodacom traded 0.11% firmer at R170.00, close to a 52-week high of R171.10. MTN gained more than 12% over the past 90 days and Vodacom almost 17%.
