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Old Mutual Plc (OML) declined the most in three weeks after 15 global banks were downgraded by Moody’s Investor Services, ending a six-day rally that took the stock to levels some analyst consider overbought.
Shares in the U.K.’s third-largest life insurer fell 1.4 percent, the most since June 1, to 20.41 rand at the close in Johannesburg. The stock climbed 6.9 percent between June 14 and yesterday, taking its 14-day relative strength index to 71.3, the highest since Feb. 20.
Shares in banks and insurers weakened in Europe after Moody’s cut credit ratings for Credit Suisse Group AG, Morgan Stanley and 13 other banks. The lenders have “significant exposure to the volatility and risk of outsized losses inherent to capital-markets activities,” Moody’s Global Banking Managing Director Greg Bauer said in a statement.
“The movements over the last week have been driven by global sentiment,” Harry Botha, an analyst at Avior Research Ltd. who has an outperform, the equivalent of buy, recommendation on the stock, said by phone from Johannesburg. “I think fundamentally it stays cheap.”
The RSI shows how rapidly prices advanced or dropped during a specified time period. A reading of 70 or above signals to some investors that shares are set to fall.
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