Johannesburg’s stock market pulsed higher by midsession trade on Thursday as a firm gold price and enthusiasm for equities, triggered by Wednesday’s US Federal Reserve rate cut, boosted local shares, dealers said.
”The tell-tale sign for me is if banks and resources are running the same way — it tells you it’s positive sentiment that’s driving the market,” said Abri du Plessis, head of equities at Gryphon Asset Management in Cape Town.
US stocks rallied on Wednesday after the Federal Reserve surprised the market with a higher-than-expected 50 basis point cut in interest rates.
By 1130 GMT, the JSE all-share index had zipped 0,7%or 65,9 points higher to 9,710.17 points in spite of a stronger rand, which often sinks the overall market as many of its biggest stocks pay costs at home and draw earnings abroad.
The market’s biggest stock, diversified mining house Anglo American — which accounts for 15% of the bourse — dug out a 2,3% gain to R137. It was the top traded stock by deals.
Subsidiary AngloGold also climbed, adding 0,8% to reach R552 after bullion, like the rand, nipped up on the back of the US rate cut, which put pressure on the dollar. It was at $319,30 an ounce at 1130 GMT compared to its New York close of $318,20.
But its gains were limited by its hedge book — which means the miner is not fully exposed to movements in the gold price.
Unhedged Harmony was the star bullion performer and leapt 4,1% to R145,90. Gold Fields trimmed earlier gains to edge up 0,6% to R119,65 after releasing weaker-than-expected results.
The country’s second largest gold producer said headline earnings for the September quarter fell to 115 cents per share from June’s 251 cents and compared to forecasts of 165 cents.
Pulp and paper group Sappi pasted on a 0,6% gain to R119,65 despite reporting a fall in annual headline earnings to $0,98 a share from $1,13 a share.
In banks, FirstRand moved up 2,2% to R7,52. Standard added 1,8% to reach R31,55.
Didata skidded 10% to R4,05 after Cisco — Didata’s biggest supplier — issued a cautious revenue outlook and on what dealers said was a souring mood at some fund managers for Didata’s planned $100-million bond issue announced this week.
Peer Datatec lost 0,8% to R7,74. – Reuters