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Johannesburg - The JSE did not escape the major uncertainty on world markets on Friday, ahead of crunch talks this weekend on the Greek debt crisis.
The uncertainty, which made investors unwilling to be exposed heading into the weekend, also encouraged them to take profits after this week’s strong run on the local market.
Most of the big double-listed shares on the JSE were lower on Friday, in line with losses in Europe. As these shares represent about 60% of the JSE’s market capitalisation, it pulled the indices down.
By midday on Friday the All-share index was 0.71% lower at 52 483 points and the Top 40 index traded 0.77% softer. The Financial index, which was the star performer this week, lost 0.48% and the Industrial index was 0.62% down. The Resources index was at that stage 1.62% lower.
Technical analysts also pointed out that the JSE is now slightly stretched on a number of sectors and the potential for profit-taking exists, if the deterioration of the global market tone is taken into account.
Imara SP Reid advised clients in their daily Market Snapshot to use the available strength as an opportunity to lock in a good portion of trading profits which have occurred as an appropriate risk control measure.
Greece again failed to clinch a deal with its international creditors on Thursday, setting up a last-ditch effort for Saturday to avert a default next week or start preparing to protect the eurozone from financial market turmoil.
"By the time the markets reopen next week, Greece may have either secured a deal or accepted default to the IMF," Craig Erlam, senior market analyst at OANDA, said in a note.
Among the big double-listed shares on the JSE Naspers [JSE:NPN] traded 0.59% lower at R1 928.56, while SABMiller [JSE:SAB] lost 0.10% to R652.33. Richemont [JSE:CFR] was 0.29% softer at R101.70 and British American Tobacco [JSE:BTI] lost 0.54% to R673.76.
Steinhoff [JSE:SHF], which will soon be listed in Frankfurt, traded 1.04% lower at R76.27 and Sasol [JSE:SOL] was 1.61% lower at R444.26 after performing strongly all week.
Old Mutual [JSE:OML], the financial services group which is listed in London and South Africa, lost 0.37% of its value and traded at R38.98. Among the local financial shares FirstRand [JSE:FSR] was 1.05% lower at R53.93, but Standard Bank [JSE:SBK] was only 0.12% softer at R161.48.
The big disappointment of the last two days is the resources sector, which lost more than 2% on Thursday and continued those losses on Friday.
This is all the more so because the index seemed to be building some support over the past two to three weeks.
Besides a strong dollar, supported by the Greek crisis, commodity prices remain low and according to analysts there is growing realisation that a turnaround is not around the corner.
The two big international role players in the sector, BHP Billiton [JSE:BIL] and Anglo American [JSE:AGL], were both sharply lower. Anglo American lost 2.17% to R185.68 while BHP Billiton was 1.60% weaker at R251.00. Glencore [JSE:GLN] lost 1.12% to R51.15.
South32, which was unbundled from BHP Billiton last month, lost 3.28% to trade at a new all-time low of R17.10. The share, which was listed on May 17, is now 12.65% lower than the all-time high reached on May 20 when it traded at R21.75.
