SARAH BULLEN, Johannesburg | Wednesday 5.00pm.
THE Johannesburg Stock Exchange gave a good rally on Wednesday in a strong session sparked by an announcement by major commercial banks of a rate cut.
Nedcor, ABSA, Saambou and Standard Bank announced one percentage point reductions in their prime lending rates. The expectation of a rates cut has been fuelling the market for a while and dealers were quick to react to the news. The all share index ended 1,71% up on the day, fuelled primarily by a 2,83% jump in the financial index and a 1,86% jump in the industrial index.
Dealers said there was good, solid buying across the board from both domestic and international investors, with a jump in volume to R1,6-million changing hands. Bonds had an extremely good run, with the R150 shedding some ten basis points to a 15,77% yield.
Moving against the expected trend, the rand also firmed on news of the rate cut. Dealers said it was probably as a result of currency changing hands as money flowed into the stock market.
At 4.30pm the rand was trading at around R5,58 to the dollar. On the international front, Japanese markets got a boost when the Nikkei shot up over 4%. The gains spilled over into international market with European bourses posting solid gains.