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World markets, commodities boost JSE

The JSE was in positive territory in noon trade on Friday, boosted by a turnaround on world markets and a bounce in precious metals prices. While dealers were not convinced the strength would last, it was nevertheless welcomed after the recent weakness.

By 12.01pm, the all share index advanced 1,84%. Resources rallied 2,44% and the platinum mining index jumped 2,07%, while the gold mining index gained 1,44%. Industrials and financials firmed 1,68% and 1,01% respectively, while the banks index was 0,66% better.

The rand was bid at 6,52 per dollar from 6,55 when the JSE closed on Thursday, while gold was quoted at $652,10 a troy ounce from $645,20/oz at the JSE’s last close.

A dealer said that the JSE was benefiting from stronger world markets generally, a turnaround in emerging markets as well as higher commodity prices.

“World markets are all stronger. The US was up last night after the softer-than-expected GDP number eased fears of a rate hike next month and this gave everyone some comfort. Emerging markets are benefiting from the Brazil story — Moody’s upgraded two of their cities — and their currencies are looking better

as well.”

The dealer noted that while Brazil had rebounded on Thursday, it had been hit hard the previous session.

“Today the market did start a lot firmer than it is now and it has drifted gently down throughout the day. With the US and UK holiday on Monday, I think there might have been some short covering. We might see more of this towards the end of the day.”

A second dealer cautioned that while the JSE was a lot stronger, this did not mean the volatility of the last few days had ended.

“The market is reacting to individual news. Yesterday [Thursday] it was the US GDP number which quelled rate hike fears. Today there might be something else that could take it the other way,” he commented.

On the resources index, London-listed Anglo American added 2,99% or R7,53 to R259,53. BHP Billiton was boosted 2,32% or R2,93 to R129,05.

Petrochemicals group Sasol strengthened 2,57% or R6,36 to R254,11.

Harmony Gold was 2,31% or R2,10 higher at R93,10, Gold Fields gained 1,93% or R2,60 to R137, while AngloGold Ashanti inched 84 cents higher to R305,06.

Impala Platinum leaped 2,73% or R30 to R1 130 and AngloPlat added 1,34% or R7,84 to R592.

Swiss-listed luxury goods group Richemont roared ahead 3,98% or R1,17 to R30,58 and London-listed brewer SABMiller climbed 1% or R1,20 to R121,20.

Mittal Steel strengthened 2,83% or R1,80 to R65,50.

Cellular network operator MTN jumped 2,72% or R1,50 to R56,70 and Telkom rang up 2,8% or R3,75 to R137,75.

Retailer Shoprite bounced 3,99% or 94 cents to R24,49 rand, while Pick ‘n Pay perked up 2,63% or 75 cents to R29,25.

On the financial front, specialist bank Investec surged 4,02% or R13,22 to R342,47.

FirstRand firmed 1,35% or 24 cents to R18,04, Standard Bank climbed 66 cents to R77,50 and Nedbank was R1,05 in the black at R117,10.

Life insurer Liberty Group was up 1,81% or R1,25 at R79.

Short-term insurer Mutual & Federal, however, dived 8,48% or R2,80 to R30,20 and Santam tumbled 2,67% or R2 to R73.

Santam said on Friday that the short-term insurance market continued to soften amid competition for market share, contributing to downward pressure on rates and therefore underwriting margins. The growth of its quality business nevertheless remained healthy. – I-Net Bridge

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Alison Maltz
Guest Author

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