SARAH BULLEN and Reuters, Cape Town | Wednesday 4.30pm
THE Johannesburg Stock Exchange saw far stronger trade on Wednesday on firmer international sentiment as fears rising from instability in Latin America abated.
Argentine financial markets recovered on Tuesday in what traders there called a technical rebound, which has eased short term concerns about Latin America. Dealers said there is a perception that the market overreacted to the Argentine instability.
At close of trade the all share index had firmed 0,36% — as both the financial and industrial boards saw strong gains. The financial board climbed 0,77% while the industrial index gained 0,55% after trading flat for most of the day. A surprise fall came in gold stock that saw the index lose 1,64% despite an almost $2 an ounce rise in the gold price.
Dealers said that the JSE followed the mood of most major international markets that were recovering from losses sustained on Tuesday as a result of economic instability in Argentina.
The rand was firmer in quiet early trade amid profit-taking after Latin American markets rebounded. At 4.00 it was trading at R6,13 to the dollar and R9,56 to the pound.
Local bonds were also edging firmer on short-covering amid perceptions that the sell-off on Tuesday was overdone. By 4.30pm the R150 had firmed to a 14,28% yield from Tuesday’s fall to 14,45%.
Asian markets put in a mixed session, with Hong Kong’s Hang Seng index losing a solid 3,11% while Tokyo’s Nikkei Dow ended on a 0,97% gain. European markets look firm as they move into the late afternoon while United States markets moved higher in early Wednesday trade on positive domestic indicators.