OWN CORRESPONDENT, Johannesburg | Tuesday 3.45pm.
SOUTH African stocks shook off the Nasdaq blues in early trade on Tuesday, reversing opening losses as the rand’s woes translated into big gains for export-oriented commodity blue chips.
Investors were also seen trolling for bargains in a market that has lost close to 19% since romping to record highs in January.
”The guys like the resource and export stocks now and elsewhere they are picking the bottom,” said one dealer.
The All Share index was up 0.64% to 7,500.7, led by the commodity sector, with the blue chip top 20 resources index up 1.64% to 9,241.9.
Big gainers on the resource board included steel maker Iscor, which was up a blistering 7.50% to R17.20 — still well down from the R28.50 it climbed to in January, when commodity shares were fueling the bourse’s record bull run.
Paper giant Sappi added almost three percent to its 5.50 percent Monday gains. Interim results released on Monday were robust, leaving market expectations in the dust.
The rand briefly broke once again above the 7.0 bid to the dollar level in early trade on Tuesday as euro weakness and an escalating political crisis in neighbouring Zimbabwe continued to take its toll on the ailing currency.
The rand has held up well against the euro and the Australian dollar but most commodity exporters earn dollars, so its weakness against the US currency is beneficial to them.
The information technology board put in suprising gains after the Nasdaq fell almost four percent on Monday amid nagging questions about the value of the tech sector. The Johannesburg bourse’s info tech index was up almost a full percent to 834.5.
The industrial index was up 0.37% to 8,341.0 with technical resistance seen kicking in at 8,389. — Reuters