A near R1.6 trillion rout in September has left South Africa\u2019s benchmark stock index at its most oversold level in 17 months, according to a momentum indicator that measures the speed and magnitude of recent price moves.<\/p>\n\n\n\n
The FTSE\/JSE Africa All-Share index slumped 6.7% in September, with precious metals miners plunging more than 17% as prices of gold and platinum fell. <\/p>\n\n\n\n
That wiped more than R1.61 trillion from the gauge\u2019s market capitalisation, according to data compiled by Bloomberg.<\/p>\n\n\n\n
The gauge\u2019s 14-day relative strength index dipped below 30 this week for the first time since April last year, signalling to some technical analysts that it may have fallen too far, too fast and is due for a rebound. <\/p>\n\n\n\n
The last time the RSI dipped below 30, that preceded an 11-month, 57% rally that only came to an end at the outbreak of the Iran war.\u00a0<\/p>\n\n\n\n
South African stocks have underperformed their emerging-market peers in recent months as elevated oil prices and the decline in metal prices weighed on the country\u2019s terms of trade. <\/p>\n\n\n\n
While the benchmark could rebound based on technical signals, a sustained recovery would require a softer dollar and lower real yields to support gold, according to Robert Naess, a portfolio manager at Nordea Investment Management.<\/p>\n\n\n\n
China\u2019s economic growth is also key, as the Asian country is the biggest importer of South African commodities, while Naspers, one of the gauge\u2019s largest constituents, is highly correlated to Tencent Holdings, in which it owns a 23% stake, Naess said.<\/p>\n\n\n\n
\u201cThe selling looks driven by sentiment and flows rather than fundamentals, as earnings expectations have held up far better than share prices,\u201d he said. <\/p>\n\n\n\n
\u201cA technical bounce is likely, but a lasting recovery depends on the dollar, gold and China.\u201d<\/p>\n\n\n\n
The benchmark erased a loss of as much as 1.5% on Friday to trade 0.3% higher as of 2:14 p.m. in Johannesburg.<\/p>\n","protected":false},"excerpt":{"rendered":"
The JSE’s Africa all share index slumped 6.7% in September, wiping over R1.6 trillion from the gauge’s market cap.<\/p>\n","protected":false},"author":59,"featured_media":856374,"comment_status":"open","ping_status":"","sticky":true,"template":"","format":"standard","meta":{"_sma_x_autopost_status":"posted","_sma_x_autopost_error":"","_sma_x_post_id":"2105670834933158059","_sma_facebook_post_id":"191437357620492_2223024341851298","_sma_instagram_post_id":"18138768664625818","_sma_x_attempts":1,"footnotes":""},"categories":[11121],"tags":[26678,107,26679],"class_list":["post-877919","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance","tag-jse-all-share","tag-naspers","tag-robert-naess"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/877919","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=877919"}],"version-history":[{"count":5,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/877919\/revisions"}],"predecessor-version":[{"id":877929,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/877919\/revisions\/877929"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/856374"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=877919"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=877919"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=877919"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}