Financial stocks pushed the South African bourse higher at midday on Friday, buoyed by a stronger rand and improved sentiment on global markets, dealers said.
But they said volumes were thin as investors preferred to sit on their cash, signalling that they were not quite ready to believe that a bear market was over.
The all-share index put on 0,78% or 71,56 points to 9,752.4 points at 1050 GMT. The value of trades was about R780-million.
”World markets are looking pretty decent at the moment, and all in all everything is looking good for the market. But volumes are still looking very thin. The guys are not ready to put their cash in just yet,” said one dealer.
Banks led the way up, with Standard Bank putting on 2,3% or 75 cents to R32,95, while financial services firm Old Mutual notched up 2,6% or 35 cents to R13,75.
Interest-rate sensitive stocks like banks and retail issues have been hammered in past months on a weak rand, which has contributed to the Reserve Bank’s decision to hike interest rates four times this year.
The rand opened in a new range on Friday, after overnight action overseas pushed it towards the year’s strongest levels on the back of growing positive inflation sentiment.
At 1043 GMT, the rand was trading at 9,63 to the dollar, compared to 9,775 at the close on Thursday.
After a brief dip at the open, luxury-goods firm Richemont shrugged off the stronger rand and traipsed higher on Friday, building on Thursday’s hefty gains. It had added 3,4% or 59 cents to R17,79 at 1049 GMT.
The Swiss-based group leapt 9,9% on Thursday after reporting a decline in earnings that were not as steep as expected.
It also took heart on Friday from a rally in the United States after retail sales outside the auto sector posted their biggest gain in six months, spurring hopes that US consumers will continue spending and keep driving an economic recovery.
Dual-listed stocks like Richemont, which makes its earnings in foreign currency, tend to lose out when the rand strengthens.
Dual-listed IT firm Dimension Data also ignored the rand, and notched up 1,18% or five cents to 430 cents, taking heart from Thursday’s rally in the United States, where the Nasdaq jumped 3,69%.
Synthetic fuels firm Sasol gave up 0,8% or 90 cents to R106, as oil prices held steady on hopes that a possible attack on Iraq could be delayed or avoided after Iraq accepted a UN resolution on disarmament.
Gold also sat in a quiet range, searching for direction as the dollar strengthened and investors moved back into equities. Spot gold was trading at $318,30/8,80 at 1026 GMT, up from Thursday’s New York close of $317,80/318,30.
AngloGold gave up 2,2% or R12,50 to R550, while peer Gold Fields added 0,14% or 15 cents to R108,20. – Reuters