Johannesburg - The steady decline in share prices on the JSE continued on Thursday morning and the All-share Index was mid-morning almost 5% lower than the 52-week high of 54 549 points reached on 22 May.
The index dropped another 0.51% to 51 854 points in morning trade and traded for the first time since 23 March this year at a level below 52 000 points.
Market sentiment is hampered by poor economic growth, fears about further downgrades of South Africa’s credit rating and international uncertainty. Foreign investors are also this year net sellers of South African equity, after net foreign inflows strongly supported the market in previous years.
International markets are also uncertain, which is bad news for the dual-listed shares on the JSE which are also listed on those markets. International investors are bracing themselves for any surprises from the UK election, a European Central Bank policy meeting and congressional testimony from ex-FBI director James Comey who was fired by President Donald Trump last month.
All the major indices were lower by mid-morning but the losses were moderate as the market was supported somewhat by the softer rand which traded against levels around R12.85 to a dollar.
At that stage the Top 40 Index was 0.49% lower on 45 587 points, after the Industrial Index lost 0.65% and the Financial Index traded 0.62% softer. The resources sector was only 0.04% higher while the Gold Index lost 0.12% after the gold price gave up some of its recent gains.
Naspers [JSE:NPN] lost another 0.26% to R2 615.00 after the share shed more than 6.3% of its value over the previous seven days. Steinhoff [JSE:SHF] , which was before Thursday’s trading session already more than 9% lower over the previous seven days, traded another 1.77% softer at R64.34.
Sasol’s [JSE:SOL] share price was hurt by the lower oil price - at below $50 a barrel . The share price lost another 2.65% to R368.74. Sasol’s income from synthetic fuel is directly linked to the oil price. Vodacom [JSE:VOD] was 1.64% softer at R164.79 and Aspen [JSE:APN] lost 1.04% to R285.06.
Anglo American [JSE:AGL]was the star performer amongst the conglomerates in the commodity sector and gained 1.67% to R176.35.
Sibanye [JSE:SGL] continued its recovery on Thursday and traded another 1.91% higher at R16.57. The share is now more than 6% higher than the 52-week low of R15.35 reached earlier this week.
The gold price lost ground and traded 0.83% softer at R1 284 per ounce, as investors took profits after the gold price gained more than 2.5% over the previous week.
Some analyst think the gold price, which is at the highest level since November last year and gained 12% this year, might soon breach $1 300 per ounce as investors position themselves for the outcome of the UK election and potential drama of former Comey’s testimony. The gold market is also tracking tensions in the Middle East.
Food retailers were lower again and Pick ‘n Pay [JSE:PIK], which reached a 52-week low on Wednesday, lost another 3.46% to a new intraday low of R56.58. Shoprite [JSE:SHP] lost 1.71% to R195.86 and Spar [JSE:SPP] was also 1.19% lower at a new 52-week low of R153.10.