adminJOHANNESBURG — Bargain hunters were active again on the JSE on Monday and this stopped the sharp fall in share prices due to growing concerns about the political situation in the Ukraine and the poorer economic prospects in China.After Asian markets reached their lowest point in a month on Monday the major indices on the JSE also opened sharply lower, but by midday almost all the losses were wiped out.
The resources sector was higher after it fell through an important resistance level of 54,600 last week due to strong selling pressure.
By midday, the all share index traded at 46,415 points, just 0.01 percent higher than Friday’s close. The Top 40 index lost only 0.04 percent to 41 745 points.
The recovery was to be expected as Imara SP Reid said in its daily market snapshot that the whole JSE is on short term oversold, but the very slight improvement is probably shortlived as there is still residual selling pressure evident in the market.
The firm’s technical analysts still think that the Top 40-index can go as low as 41,200 points. The resources index was 0.64 percent higher on 54,483, but Imara SP Reid said indications are that a resistance level of 53,080 is still in sight.
The industrial sector, which lost 720 points on Friday to trade below 54,000, lost another 0.6 percent to trade at 53,149.16.
The industrial index is heavily influenced by Naspers which is still under selling pressure. The media giant, which lost more than 4 percent on Friday after being more than 6 percent lower earlier in the day, was by midday another 4.78 percent lower on R1,170.28. On March 11, the share traded R184 higher at R1,354.09.
The attention is on Tencent, Naspers’ Chinese subsidiary of which it owns 34 percent, which could be negatively influenced by poor economic prospects in China. On Friday, China’s central bank ordered a halt to some mobile payment methods used by internet companies, amid concerns over the security of their verification procedures. The move seems to be detrimental for the mobile payment businesses of Tencent.
Over the weekend there were reports that Tencent’s competitor Alibaba is set to list in the US. The bad news comes amidst concerns that Naspers might be overvalued.
For the rest week it is expected that the events in Ukraine will be a big market mover because the prospects of severe sanctions by the West against Russia can be detrimental for emerging markets. The Russian market fell by more than 5 percent on Friday. — Fin24
Online Reporter