The JSE remained in positive territory by noon on Monday, still taking its direction from overseas markets, which continued to gain some momentum in attempts to recover some of last week’s losses.
“The market is volatile still, but we are seeing bargain hunting as well,” a trader said.
He said that it was expected that after a bad day on Friday, markets would on Monday show some signs of recovery.
“Friday was a very bad day, and it is expected that markets start showing some gains today,” he said. “We can expect our local market to continue on the upside if gains on the overseas markets can hold.”
The trader explained that gold miners were coming under pressure in an expected turn of events. Because gold stocks had been the safe haven last week, it is only natural that when things turn around, the opposite happens.
“Now people are selling off some of those stocks and we are seeing profit-taking,” explained the trader.
At 12.10pm, the JSE all-share index had gained 3,36%, with resources adding 4,14%. Platinum stocks were 2,53% higher, while gold miners continued to come under pressure and lost 1,92%.
Industrials were up 3,24%, financials were 1,94% firmer and banks rose 2,45%.
The rand was bid at R9,22 to the dollar from R9,39 when the JSE closed on Friday, while gold was last quoted at $860,98 a troy ounce from $889 when the JSE last closed.
Platinum was trading at $991/oz from a previous close of $977,50/oz. Brent crude was at $77,05 per barrel, from its previous close of $74,09.
Dow Jones Newswires reports that the FTSE 100 added 5,7% at 4 154,8, staying positive after an opening surge on a combination of bargain hunting and short covering after last week’s dire sell-off, one trader says.
A trader said British Prime Minister Brown and Chancellor Alistair Darling’s joint speech was “very accomplished” and gave some investors a bit of confidence to get back into the market.
However, another trader said he was still cautious. “I don’t think all the details have been made clear yet and we still need to see what Germany and the other European governments will say,” he said.
United States stock futures and world stock markets rallied on Monday, as agreements reached in Paris and Washington, DC, to bolster the banking system restored some confidence after a week in which stocks dropped by nearly 20% in the US and by more around the globe.
S&P 500 futures rose 47,8 points to 938,80 and Nasdaq 100 futures rose by 61,80 points to 1 344,20. Dow industrial futures climbed 327 points.
On the JSE, Anglo American gained R15, or 6,55%, to R244 and BHP Billiton was up R9,50, or 6,16%, to R163,75.
Sasol added R8,05, or 3,25%, to R256.
Gold miner AngloGold was up R1,50 to R182,99 while Gold Fields lost R5,34, or 6,17%, to R81,21 and Harmony lost 86 cents to R92,64.
Among platinum miners, Anglo Platinum gained R27,50, or 4,41%, to R651,50, Impala Platinum was up R1,30 to R148,80 and Lonmin added R17, or 6,91%, to R263.
Among other miners, African Rainbow added R4,09, or 3,30%, to R128,09, Kumba Iron Ore came up R4,10, or 3,15%, to R134,10 and Exxaro added R1,50, or 2,22%, to R69.
Financial services group Old Mutual edged down three cents to R10,97 while Sanlam added 60 cents, or 3,67%, to R16,95.
Among banks, Nedbank added R4,64, or 5,27%, to R92,66 and Absa gained R3,94, or 4,28%, to R95,95.
Standard Bank was up R2,71, or 3,64%, to R77,12. The group on Monday announced that it had launched its third interest-bearing, tradeable retail deposit note to the retail market.
The Standard Bank retail deposit note is a low-risk investment product, which offers investors a floating interest rate linked to the three-month Johannesburg interbank agreed rate, plus a spread of 0,30%.
Investec rose by R1,90, or 4,52%, to R43,90 while RMB Holdings gave up 54 cents, or 2,35%, to R22,45.
Elsewhere on the JSE, brewer SABMiller gained R7,45, or 5,17%, to R151,45, Imperial was up R2,60, or 4,94%, to R55,20 and Bidvest added R3,10, or 3,28%, to R97,60.
Telecommunications group MTN was up R4,70, or 4,68%, to R105,20 and Telkom gained R2,52, or 2,32%, to R111,02. — I-Net Bridge