The JSE ignored weaker European markets and remained in positive territory by midday on Wednesday after having taken direction from Asian markets which rallied on the back of an interest rate cut in the US on Tuesday.
The local bourse was also held up firmly by impressive gains in banking stocks.
The all-share index was up 1,02%, resources edged up 0,53% and platinum stocks added 3,25%. However, gold stocks were off 1,02%.
Banks firmed 4,06%, financials strengthened 2,09% and industrials collected 1,04%.
The rand was last bid at R9,94 to the dollar from R10.15 when the JSE closed on Monday, while gold was last quoted at $854,08 a troy ounce from $827,65/oz at the JSE’s last close.
The platinum price was at $860,50/oz, unchanged from its previous close, and Brent crude was at $48,35 per barrel from $46,65 before.
“The banks are up nicely on the back of the stronger rand and are providing some support,” an equities trader said.
“The dollar/euro exchange rate has weakened after the US rate cut and that is supporting metal prices. However, gold stocks have remained under some pressure,” she said.
“It’s really just a continuation following the rallies in world markets after the interest rate cut in the US,” she said.
“We are likely to maintain these gains for the rest of the day. However, Dow futures are currently trading down and we may just see these having an impact later in the day,” she added.
Another trader said that the local CPIX (consumer price index excluding mortgage rate changes) and CPI data released earlier had no impact on equities.
The increase in South Africa’s CPIX for metro and other areas, which is used by the South African Reserve Bank for its inflation target, was up 12,1% year-on- year (y/y) in November from 12,4% y/y in October, Statistics South Africa said.
This is the third monthly decline after the record 13,6% registered in August.
Earlier the Nikkei was up 0,5% and the Hang Seng added 0,9%.
Dow Jones Newswires reports that the FTSE 100 was deep in the red though off the low of 4 231,1.
UK jobless claims rise and the Bank of England’s Monetary Policy Committee minutes suggest there is another rate cut to come, says a trader, who expects the rate to fall to 1,5% in the first quarter of 2009.
The FTSE was last down 0,97%.
US stocks are expected to fall significantly at the open, as investors take profits from Tuesday’s sharp rally, says Marko Jagustin, trader at GFT Global Markets.
He calls the DJIA to fall 190 points and the S&P 500 down 21,6 points.
Back in Johannesburg, BHP Billiton was off R3,25, or 1,69%, to R189,50 but Anglo American was up R8, or 3,40%, to R243.
The group earlier announced that it would slash its capital expenditure by more than 50% to $4,5-billion.
It said substantial changes to planned capital expenditure would be achieved principally by rescheduling many of its development projects.
Petrochemicals group Sasol was up R1,75 to R295.
ArcelorMittal collected R1,75, or 2,21%, to R81, Highveld Steel firmed R1, or 1,79%, to R57 and Kumba Iron Ore strengthened R3,66, or 2,25%, to R166,66.
Kumba Iron Ore said earlier that its 2009 capital expenditure has been reduced by some 20% to $425-million.
It said that the uncertainties and challenges faced by the global economy have led to a period of unprecedented volatility and rapid decreases in commodity prices.
Gold miner AngloGold Ashanti gave up R6,41, or 2,37%, to R263,61 and Gold Fields was down R1,19, or 1,24%, to R94,61, but Harmony added R2, or 1,99%, to R102,70.
Among platinum miners, Impala Platinum collected R5,53, or 4,57%, to R126,53 but Lonmin lost R3, or 2,68%, to R109.
Anglo Platinum rose R7,99, or 1,67%, to R487,49. The miner said earlier that it planned to produce 2,4 million ounces of refined platinum in 2009.
After completing a review of its capital expenditure programme, the platinum producer said it has also decided to reduce its capital expenditure for 2009 to R9,1-billion.
Elsewhere on the JSE, SABMiller added R3,51, or 2,03%, to R176,51, Barloworld collected 45 cents, or 1,01%, to R45 and Bidvest was up R1,37, or 1,41%, to R98,86.
Banker Standard Bank rose R4,17, or 5,12%, to R85,67, Nedbank added R1,90, or 2,05%, to R94,40, Absa was up R3,47, or 3,30%, to R108,47 and FirstRand strengthened 54 cents, or 3,60%, to R15,56.
Financial services group RMB Holdings firmed 78 cents, or 3,33%, to R24,18, but Sanlam shed 19 cents, or 1,07%, to R17,61.
Among retailers, JD Group gained R1,54, or 5,01%, to R32,27, Shoprite firmed R2,36, or 4,82%, to R51,36 and Massmart was up 96 cents, or 1,17%, to R82,92.
Packaging group Transpaco was unchanged at R4,10. The group earlier said that it expects its earnings and headline earnings per share to be between 50% and 60% higher for the six months ending December compared with those reported the same time a year ago, it said on Wednesday.
Telecommunications group MTN Group added 96 cents to R100,96 and Telkom was up 23 cents to R113,73.
It was announced earlier that Kuwait-based wireless carrier Zain this week launched its 3.5G network in Ghana, a territory dominated by local operator MTN Group.
Zain, which operates in 22 countries across the Middle East and Africa, has invested over $420-million in Ghana and will rapidly be rolling out network infrastructure across the country as part of its stated goal of becoming the world’s top 10 mobile operator by 2011. — I-Net Bridge