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Johannesburg - Bargain hunters came to the fore on Tuesday morning on the JSE to give the major indices a modest, but very welcome, boost.
The star performers were the resources and financial sectors, which did not surprise technical analysts as they have been saying for a while now that these sectors are heavily oversold.
The result was that the All-share index traded 0.61% higher at 51 427 by midday, while the Top 40 index gained 0.66% to 46 056.
By midday the Resource index was 1.23% stronger than on Monday, while the Financial index improved by 0.83% to 46 056.
The Industrial index gained only 0.30%, but Imara S Reid technical researchers said the index seems to be preparing for another assault on the significant resistant level of 60 500. By Tuesday midday the index was just below 60 000.
There was no impetus from Wall Street as the market was closed for a holiday on Monday, but the European markets were slightly higher on expectations that the European Central Bank will announce a further stimulus package for the eurozone later this week.
Read: European shares inch up
This should benefit the South African market, as European interest rates are already at record lows and any further drop or even asset buy-back measures will encourage investors to look for higher yields in emerging markets.
On the corporate front most of the attention was on Steinhoff [JSE:SHF] which lost 3.3% to R51.10. Steinhoff was punished for its exposure to the JD Group [JSE:JDG], of which it owns 86%.
The JD Group, which has a big exposure to the emerging market, said in a statement that it expects to report a headline loss of up to 570 cents a share for the year to June 30, compared with earnings per share of 395.2 cents a year earlier.
More than 12 million shares in Steinhoff were sold for over R664.4m in 3 376 transactions, ten times more than any other share.
Separately Steinhoff said that its full-year earnings rose by as much as 15%, but the market was more concerned about the JD Group’s struggles.
Ironically the JD Group rose by 2.58% on Tuesday morning, after initially gaining more than the 5%.
The struggling furniture retailer said on Tuesday it would sell its financing arm to an international consumer finance group. The transaction, which does not include its insurance operations, must still be finalised.
Read: JD Group soars on finance unit sale news
The drastic reaction of the market shows how nervous it is about credit to the emerging market following the African Bank [JSE:ABL] debacle.
JD Group said the sale would reduce its funding requirements and improve its balance sheet.
Despite Tuesday morning’s gains, the share price is still 9.1% lower for the month and 18.2% for the year.
FirstRand [JSE:FSR] was the star performer in the financial sector and rose 1.43% to R44.12.
In the resources sector Anglo American [JSE:AGL] improved by a solid 2.35% to R275.51 and BHP Billiton [JSE:BIL] rose to R335.99.
- Fin24
Now read: JSE advances as Bidvest jumps
The star performers were the resources and financial sectors, which did not surprise technical analysts as they have been saying for a while now that these sectors are heavily oversold.
The result was that the All-share index traded 0.61% higher at 51 427 by midday, while the Top 40 index gained 0.66% to 46 056.
By midday the Resource index was 1.23% stronger than on Monday, while the Financial index improved by 0.83% to 46 056.
The Industrial index gained only 0.30%, but Imara S Reid technical researchers said the index seems to be preparing for another assault on the significant resistant level of 60 500. By Tuesday midday the index was just below 60 000.
There was no impetus from Wall Street as the market was closed for a holiday on Monday, but the European markets were slightly higher on expectations that the European Central Bank will announce a further stimulus package for the eurozone later this week.
Read: European shares inch up
This should benefit the South African market, as European interest rates are already at record lows and any further drop or even asset buy-back measures will encourage investors to look for higher yields in emerging markets.
On the corporate front most of the attention was on Steinhoff [JSE:SHF] which lost 3.3% to R51.10. Steinhoff was punished for its exposure to the JD Group [JSE:JDG], of which it owns 86%.
The JD Group, which has a big exposure to the emerging market, said in a statement that it expects to report a headline loss of up to 570 cents a share for the year to June 30, compared with earnings per share of 395.2 cents a year earlier.
More than 12 million shares in Steinhoff were sold for over R664.4m in 3 376 transactions, ten times more than any other share.
Separately Steinhoff said that its full-year earnings rose by as much as 15%, but the market was more concerned about the JD Group’s struggles.
Ironically the JD Group rose by 2.58% on Tuesday morning, after initially gaining more than the 5%.
The struggling furniture retailer said on Tuesday it would sell its financing arm to an international consumer finance group. The transaction, which does not include its insurance operations, must still be finalised.
Read: JD Group soars on finance unit sale news
The drastic reaction of the market shows how nervous it is about credit to the emerging market following the African Bank [JSE:ABL] debacle.
JD Group said the sale would reduce its funding requirements and improve its balance sheet.
Despite Tuesday morning’s gains, the share price is still 9.1% lower for the month and 18.2% for the year.
FirstRand [JSE:FSR] was the star performer in the financial sector and rose 1.43% to R44.12.
In the resources sector Anglo American [JSE:AGL] improved by a solid 2.35% to R275.51 and BHP Billiton [JSE:BIL] rose to R335.99.
- Fin24
Now read: JSE advances as Bidvest jumps
