The JSE was in positive territory just before noon on Thursday, having bounced following the previous two days’ sharp sell-off. However, dealers questioned whether the bourse’s recovery was sustainable, saying there was still a lot of negative sentiment in the market.
By 11.51am, the all-share and all-share industrial indices added 1,02% and 0,91% respectively. Resources rallied 1,59%, the gold-mining index gained 0,71% and the platinum-mining index jumped 2,49%. Financials firmed 0,34% and the banks index was 0,5% better.
The rand was bid at R6,27 per dollar from R6,29 when the JSE closed on Wednesday, while gold was quoted at $546,90 a troy ounce from $544,85/oz at the JSE’s last close.
“This morning everything bounced following the negativity over the past couple of days. The Dow was marginally better last night [Wednesday] and the Nikkei was very strong this morning,” a dealer said.
While the rand had firmed since the opening, precious metals prices had picked up. They were helped by relief that while the Bank of Japan had ended quantitative easing, it had left interest rates unchanged at zero. This meant that people could still use yen to buy commodities.
He added, however, that since its rebound at the opening, the JSE had just drifted for the rest of the morning.
“The market is still not looking healthy. There is still a lot of negative sentiment and I’m seeing a lot of selling coming into the market. I think this is a DCB [dead cat bounce],” he commented.
The dealer expected consolidation on the JSE to continue at least until next Thursday’s futures close-out.
On the resources index, Anglo American added 1,93% or R4,12 to R217,76 and BHP Billiton was boosted 2,29% or R2,25 to R100,60.
Gold Fields gained 1,28% or R1,50 to R118,75 and Harmony was 70 cents higher at R80.
AngloPlat jumped 2,46% or R11,95 to R497, while Impala leaped 2,7% or R26,50 to R1 006,50.
Junior gold miner Simmer and Jack Mines (Simmers), however, dived 19,33% or 29 cents to R1,21, having traded as low as R1,13 on fears that the company’s stock could be suspended from the JSE following the application by shareholder Vulisango.
The dealer said that a lot of offshore players held Simmers, which was primarily a “speculative stock”.
Barplats, meanwhile, plunged 14,47% or R1,10 to R6,50.
On the all-share industrial index, Swiss-listed luxury goods Richemont rose 1,09% or 30 cents to R27,85.
Hospital group Netcare surged 4,55% or 35 cents to R8,05.
Cellular network operator MTN Group jumped 3,11% or R1,74 to R57,75 and Telkom climbed 1,3% or two rand to R155,35.
Media group Naspers notched up 2,02% or R2,35 to R118,85.
Furniture group Steinhoff forged ahead 3% or 60 cents to R20,60 following its strong results released on Wednesday.
Pulp and paper producer Sappi strengthened 3,02% or R2,60 to R88,60 after earlier trading at a best level since November 2004 of R89,20.
On the financial index, FirstRand firmed 1,75% or 32 cents to R18,64 and RMB Holdings rose 1,48% or 41 cents to R28,20.
Standard Bank inched up 30 cents to R77,60. Before the opening, it reported a 23% increase in headline earnings per share to 702,3 cents for the year to the end of December 2005 from a previous 570,3 cents to 702,3 cents per share.
This exceeded than the I-Net Bridge consensus forecast of headline earnings per share of 666,5 cents. The group declared a dividend 267 cents per share compared with 231,5 cents in 2004.
Nedbank, however, eased 87 cents to R121,30 and Absa dipped 70 cents to R112.
Life insurer Sanlam was 1,81% or 27 cents stronger at R15,17 after it reported a 99% increase in headline earnings per share for the year to the end of December 2005 to 229,8 cents from 115,3 cents a year earlier. The company declared a total dividend for the year of 65 cents per share, a 30% increase on the 50 cents per share distributed in 2004.
While Old Mutual inched four cents higher to R19,66, Liberty Group slipped 55 cents to R82,25. — I-Net Bridge