* Top 40 index rebounds 0.74 pct
* Moody’s downgrade may weigh on mkt
JOHANNESBURG, Sept 27 (Reuters) – South Africa stocks
rebounded on Thursday from steep losses in the previous session,
led by heavyweights such as world No. 1 platinum producer Anglo
American Platinum, but a Moody’s downgrade and
technical factors could cap gains.
The Top-40 index finished 0.74 percent higher at
31,392.10 while the wider All-Share index firmed 0.57
percent to 35,616.60.
The Top-40 booked its biggest one-day percentage decline
since early April on Wednesday on jitters over on-going illegal
mining strikes. While investors on Thursday bought into those
dips, the charts suggest the market could head down again.
“What we are getting today is just a recovery off the very
sharp drop yesterday,” said George Glynos, managing director at
financial consultancy ETM.
“But the weekly chart suggests the bias is for more of a
retreat. I would look to be selling up towards prior high levels
of 31,714 and to target a move down to 30,800, which was a prior
high on June 20,” he said.
On a weekly chart, the 14-day relative strength index – a
measure of momentum – hit its oversold line about 2 weeks ago
and has been falling from there since.
Investors may also be put in a bearish mood by a downgrade
on Thursday, announced after the market closed, by Moody’s
Investor Service, which pulled South Africa’s government bond
rating down one notch to Baa1 from A3.
Continued…
