A more than 2% rally in resources stocks pushed the JSE into positive territory by noon on Tuesday as market participants covered their short positions in anticipation of a possible interest-rate cut on Thursday. Traders noted that the local market is also consolidating its gains after a hefty 7% jump on Monday.
By 11.55am the all-share index had collected 1,83%, led by a 2,29% gain in resources and a 1,52% rise in platinum stocks. However, gold stocks gave up 1,46%. Financials were up 0,61%, banks added 0,35% and industrials jumped 2,11%.
The rand was last bid at 10,16 to the dollar from 10,14 when the JSE closed on Monday, while gold was last quoted at $771,90 a troy ounce from $768,35/oz at the JSE’s last close.
The platinum price was at $821,50/oz, unchanged from its previous close, and Brent crude was at $43,34 per barrel, barely changed from $43,42 before.
“Stocks turned positive on increasing anticipation of an interest-rate cut this week,” a local trader said.
“Some participants are covering their short positions ahead of Thursday’s decision,” he said.
“Markets are aggressively pricing in some major rate cuts by next year,” he added.
While the outcome of this week’s monetary policy committee meeting is likely to be a close call, the consensus is for South Africa’s repo rate to be cut by 50 basis points to 11,5%, a survey of leading economists by I-Net Bridge shows.
Of the 16 economists polled, nine are expecting a 50-basis-point reduction, while two are expecting a cut of 100 basis points. Five economists spoken to expect rates to remain unchanged.
Global markets are mixed, with the Nikkei closing up 0,8% but Hong Kong’s Hang Seng down 0,8%. Dow Jones Newswires reports that London shares edged higher, shaking off early losses, with mineral extractors among the strongest performers. The FTSE was last up 0.66%.
On the JSE, Anglo American was up R4,50, or 2,10%, to R218,50 and BHP Billiton added R5,11, or 3,04%, to R173,01.
Petrochemicals group Sasol jumped R13,50, or 4,99%, to R284.
ArcelorMittal was up R2,50, or 2,78%, to R92,50 and Kumba Iron Ore firmed R6,15, or 3,94%, to R162,40.
Gold miner AngloGold Ashanti gave up R6,99, or 2,83%, to R240,01 and Gold Fields was down 43 cents to R84,57.
Among platinum miners, Anglo Platinum rose R9,51, or 2,37%, to R410,01 and Lonmin gained R7,05, or 7,75%, to R98.
Elsewhere on the JSE, brewer SABMiller collected R6,01, or 3,58%, to R174, Bidvest was up R2,50, or 2,40%, to R106,65 and Barloworld added R2, or 4,65%, to R45.
However, Imperial was down R1, or 1,59%, to R62.
Banker Absa firmed R1,46, or 1,33%, to R110,96, while the other banks were flat.
Retailer JD Group added R1,76, or 6,23%, to R30,01, Massmart was up R2,45, or 3%, to R84, Pick n Pay collected 77 cents, or 2,37%, to R33,30 and Spar rose R1,40, or 2,64%, to R54,40.
Construction group Aveng was up 66 cents, or 2,30%, to R29,31 and Murray & Roberts firmed R1,07, or 2,58%, to R42,48, but Pretoria Portland Cement gave up R1,31, or 4,09%, to 30.70 rand.
Telecommunications group MTN Group edged up 16 cents to R94,30 and Telkom rose R1,20, or 1,19%, to R101,70. — I-Net Bridge