Johannesburg - Share prices on the JSE were heading lower again on Friday despite technical analysts' view that the market is ripe for bargain-hunting, as various sectors are oversold.
It seems investors are nibbling but the trading action lacks conviction. Thursday was the second consecutive session that the market recovered towards the end of the day, but lacked sufficient momentum to push the indices in the black.
By midday on Friday the All-share index was another 0.45% lower at 52 564 points, which means the market is now about 5% lower than the all-time high of 55 188 points reached in April this year.
The Top 40-index is still hovering above important support levels of between 45 800 and 46 200, which must not be breached for the market to regain upward momentum soon.
There was not much support for the JSE from abroad as Wall Street lost ground on Thursday afternoon and European and Asian markets are delivering a rather mixed performance on growing uncertainty over the debt situation in Greece.
The tense standoff between heavily indebted Greece and its creditors hung over a meeting of finance ministers from the Group of Seven leading industrialised nations in Germany.
International Monetary Fund chief Christine Lagarde, who was attending the G7 meeting, reportedly warned of the potential for a Greek exit of the 19-nation eurozone and said such a scenario would not be "a walk in the park" for the single-currency area.
The US market is also hampered by continuing mixed signals about the state of the US economy. On Thursday it was announced that pending US home sales improved by 3.4% - easily ahead of an anticipated reading of 0.9% - but in contradiction to that, jobless claims continue to rise marginally and were recorded at 282 000 ahead of the anticipated 270 000.
The technical analysts of Imara SP Reid on Friday morning said in their daily Market Snapshot that market trading action worldwide lacks outright conviction in either direction, and that in all likelihood the near-term market tone will hinge on the type of resolution finally agreed upon on Greece. An outright refusal from Greece to settle with the IMF would create a degree of inconsistency in the markets.
If Greece defaults on its debt, it will have serious repercussions for the banking system worldwide and local financial institutions will also be affected. That is probably why the Financial index continues to fall, despite analysts saying that banking shares are heavily oversold and should enjoy technical support at current levels.
Standard Bank [JSE:SBK] is now almost 7% lower over the past 30 days, and the share price lost another 0.98% to R162.40 on Friday morning. The Financial index was another 0.82% lower.
Resources shares were the only major sector in the black and the Resources 10 index was only 0.09% higher by midday on Friday. Imara SP Reid said resources shares have so far failed to respond to the marginally weaker dollar, which is supposed to be good news for commodity prices.
Anglo American [JSE:AGL] lost 0.79% to R188.97 and BHP Billiton [JSE:BIL] traded 0.33% lower at R253.37.
The Industrial index was another 0.51% weaker at 66 774 points and is now below the important psychological level of 67 000.
Sasol [JSE:SOL] lost 1.09% to R424.22 and SABMiller [JSE:SAB] traded 1.13% softer atR654.11. Naspers [JSE:NPN] was only 0.17% lower but is now again trading below R1 800 at R1 793.00.