Markets swing wildly after Thursday's bloodbath

Global markets are in rebound mode following Thurday's bloodbath which saw major stock exchanges suffer their worst losses in decades.

Despite analysts expecting markets to remain in their rout, the Nasdaq, Dow and S&P 500 were all in the green by Friday mid-morning. Domestically the JSE All-Share was up 3.45% and the Top 40 was up 3.49%, after respectively having closed 9.72% and 9.92% - the worst crash suffered by the local bourse since 1997.

Sasol in particular made a major turnaround on Friday, climbing 43.60% to R53.41 around 09:30, following reports that it was considering selling its assets to ease its financial woes. It had ended Thursday's session at R37.24, having lost 30%. This past week saw Sasol shares losing almost 95% of their value since April last year and as at Thursday, Sasol was the worst-performing share in all emerging markets.

Commodity stocks, which had also been hit on Thursday, were turning the corner. Gold was down 3.12% at $1584.26/Oz at close on Thursday, and platinum had lost 8.66% to trade at $789.22/Oz. Palladium closed 13.49% lower at $200.49/Oz, Fin24 previously reported. Gold, platinum and palladium were up 0.73%, 4.37% and 6.04% respectively on Friday morning. 

The rand which had breached the R16.50/$ mark during Thursday's session and closed 1.8% lower at R16.49 as investors fled to "safe haven" currencies. It started Friday at R16.54 to the greenback and was trading 1.46% stronger at R16.28 by 10:48.

Thursday's volatility was spurred by US president Donald Trump's decision to implement a 30-day travel ban against European countries except for the UK. Although the US Federal Reserve Bank intervened by deploying quantitative easing measures – of some $500 billion – markets still ended up returning to their "dismal" state, Botes said. "This is now the second monetary easing strategy deployed by the US that has failed to achieve its objective."

In early morning trade on Friday, Asian markets felt the aftermath of Thursday's plunge

The Nikkei index fell 7% shortly after the open. Australia's ASX was down 7.3% and New Zealand's benchmark NZX 50 slumped 7.9%, AFP reported. Trading was briefly halted on South Korea's stock exchange when the benchmark KOSPI index fell 6.8%.

Nigel Green, CEO of deVere Group, noted that the Asian-Pacific markets were "staging recoveries" which would be followed by European and US markets.

Green is of the view that some investors could profit from the volatility. "Many investors will use the temporary volatility as important buying opportunities, with some set to make a fortune from the turbulence.

"Fluctuations can cause panic-selling and mispricing. Sought-after stocks can then become cheaper, meaning investors can top up their portfolios and/or take advantage of lower entry points. This all typically results in better returns," he said.

Veteran investor Wayne McCurrie on Thursday evening suggested that the current collapse could present a buying opportunity.

ZAR/USD
17.22
(-1.17)
ZAR/GBP
22.55
(-1.13)
ZAR/EUR
20.27
(-1.11)
ZAR/AUD
12.26
(-0.81)
ZAR/JPY
0.16
(-1.29)
Gold
1971.00
(-0.47)
Silver
24.28
(-0.51)
Platinum
902.00
(+0.21)
Brent Crude
43.61
(0.00)
Palladium
2094.00
(+1.79)
All Share
55940.16
(+0.39)
Top 40
51646.23
(+0.54)
Financial 15
9963.64
(-1.90)
Industrial 25
75024.83
(+0.69)
Resource 10
56205.91
(+1.17)
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