MIKE METELITS, Johannesburg | Wednesday 11.20am.
LOCAL markets opened stronger on Wednesday, as Asian exchanges registered strong gains and Nedbank cut prime lending rates. Other commercial banks are likely to follow suit, leading to higher liquidity in the marketplace.
The all share joined in the general global cheer, picking up 48 points to 6007 at 10.50 Wednesday, while the industrial index leapfrogged to 6825, a gain of 64.
Financials cautiously moved up 87 points to 9659, while all gold index felt the flight to equities, losing 4 to 992 in early trading. The price of gold itself gained 40 cents to $289,55, inching back after yesterday’s losses.
Bonds gained on a rate cut by Nedbank, and the anticipation of other bank cuts and possibly a Reserve Bank move. The benchmark R150 grabbed 14 basis points to 15,83% at 10:50, and the rand also benefitted from easier money and renewed confidence in emerging markets by gaining almost 2 cents to R5,6025 to the dollar.
Japan’s Nikkei index blasted 575 points higher after Tuesday’s holiday, a gain of nearly 4%, while other Asian markets were mixed on on Wednesday. Barton Biggs, a major analyst at Morgan Stanley, was reported to have raised the equity weighting of Japanese stocks in his portfolio, spurring the massive buy-in. Biggs’ move reflects growing optimism about a positive resolution to the Asian and global financial crisis.
While early returns from London were not in at posting time, Frankfurt’s Xetra DAX index was up 65 points at 10.30am on Wednesday, pointing to the spread of good news westward. Oddly, the Dow Jones Industrial Average did not move on Tuesday, as investors took the day to watch American voters reject improper Republican advances.