SARAH BULLEN, Johannesburg | Monday 5.30pm.
LOCAL markets had a strong day across the board on Monday, bouncing off stronger international markets that found touch with news of US support for an International Monetary Fund relief package.
Dealers said the announcement that the United States Senate has passed an IMF plan to assist ailing economies to deal with economic consequences induced by market turmoil provided domestic markets with the ammunition for its climb. The US also agreed to provide the IMF with $90-billion for the new programme — a key positive signal for emerging markets, dealers said.
The IMF plan — plus strong third-quarter US growth figures — boosted US markets to a strong Friday close as the Dow Jones closed the week having recovered almost half the value it has lost in the last three months. While international news provided most of the drive in Monday’s rally, a 20 basis point cut in the repo rate to 20,515% from 20,718% spurred positive sentiment. Accordingly, financial stock led the day, with the financial index gaining 3,90% to boost the all share index to a 2,56% gain on the day.
European markets were also buoyed by stronger international trends on Monday, with London’s FTSE up 1,01% at lunch. Bonds were fairly strong, moving to a 15,65% yield by 4.00pm while the currency held around R5,64 to the dollar. Only gold gave a disappointing performance, with the index falling 2,36% on a lacklustre gold price.