TUESDAY, 5.30PM:
WITHIN seven minutes of opening on Tuesday, the JSE all share index had gained almost 120 points, but subsided somewhat as investors sold into the rally.
At the day’s close the financial index was up 208,3 points at 9 550,9 and the industrial index was 142,4 points higher at 6 857,5. The all gold index rose 22,6 points to 720,0 and the all share index added 95,0 points to 5 691,6. The highs for the day had been 9 566,1, 6 880,1, 718,7 and 5 717,4 for the respective indices.
The 1997 closes for the respective indices were 10 162,9, 7 425,7, 802,2 and 6 202,3.
The value traded was R863,05m compared with R589,36m on Monday, exceeding R800m for the first time since December 23, as Gauteng schools started on Tuesday.
“The rally has enticed quite a few people back into the equity waters, but the Asian crisis is by no means over… That is why I expect this rally to be short-lived,” one dealer said.
The Dow Jones rose 66,76 to 7 647,18 on Monday, while the Hang Seng index closed up 598,94 points at 8 720,00 on Tuesday.
At 4pm the benchmark long government bond, the R150, was quoted at a 13,545% yield – 19,5 basis points better than the previous close. The longer-dated R153 was also 19,5 basis points stronger at a 13,615% yield and the Eskom 168 bond was last at a 13,78% yield from 13,93% at the previous close. The release of better than expected November producer inflation of 4,7% – the lowest since September 1971 – did not have any impact.
The rand recovered from its record low of R4,9920 per dollar set on Monday and was last at R4,9745.
Gold was last at $279,65 an ounce compared with the London morning fix of 279,05.
TUESDAY, 8.00AM:
RESERVE BANK governor Chris Stals described Monday’s stock market crash as a “major adjustment” which could damage economic growth, and said it could hasten a cut in interest rates.
Analysts had feared that Stals might be forced to hold interest rates high to encourage foreign investment in South Africa, but he said on Monday that he is not yet concerned about capital outflow. He said that with inflation “behaving so well”, and the rand holding up well under the onslaught, he remains encouraged to cut interest rates in the first quarter.