Continous oil price slide plunged the JSE 2.78 percent downYesterday January 14, 2015
By Vivian Atud
Johannesburg–Sunburst Africa–yesterday was another bumpy day for investors on the JSE as the continous fall in oil prices impacted negatively on investor apetite worldwide. The JSE traded in the negative for the whole day and losed 2.78 percent down.
The top losers for the day on the JSE included: Anglo down 8.8 percent, BHPbilliton down 6.4 percent, Kumba down 5.9 percent, Implats down 8.2 percent and Sasol down 4.9 percent. The total volume traded was up from 17billion the previous day to 20.3billion. The biggest winner for the day was tiger brands following the release of positive retail data for November 2014 by Statistics South Africa (Stats SA).
Oil price continues to fall with the benchmark crude price, down more than $60 since June to below $45 yesterday and is on the way to this next threshold. According to Goldman Sachs Group Inc., West Texas Intermediate needs to remain near $40 during the first half to deter investment in new supplies that would add to the glut. Oil suppliers continue to flood the markets with over supply.
OPEC is not backing off its initial strategy of keeping its supply targets at 30 million barrels a day. Some analyst say this is an effort to curtail the rise of U.S. output. United Arab Emirates Energy Minister Suhail Al Mazrouei reiterated yesterday that shale producers will capitulate before OPEC to lower prices, the latest in more than a dozen comments from Gulf members aimed at hastening oil’s slide and lowering non-OPEC supply.
Markets closed lower the world over yesterday. Wall Street traded lower as commodity prices weighed on markets, which was further exacerbated by the World Bank dropping growth forecast. The Dow traded in the red by -1.16%, while the S&P 500 traded -0.93% lower, and NASDAQ traded -0.60% in the red. Japans Nikkei closed lower as falling oil prices continue to weigh on markets. Nikkei fell by -1.71%, while the Hang Seng closed in the red by -0.43%. European indices traded lower as oil prices weighed on the energy sector, however the ECJ gave support for an ECB bond purchase program. The DAX traded lower by -1.03%, CAC 40 down by -1.19% and the FTSE 100 traded -2.30% lower. At local close Oil (WTI) traded higher by +0.33% at $46.04 while Gold traded higher by +0.44% at $1239.80. The dollar traded 0.15% weaker against the EURO at EUR/USD $1.1791. On the local front the All Share index closed lower by -2.78% and the rand traded 0.32% stronger against the dollar at R/USD 11.4936
Investors will be expected to trade cautiously on the JSE today as they continue to watch oil price fall and other global market data. Stats SA will also later today release motor vehicle sales figures for November 2014. These are expected to be better than the previous month.
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