The JSE ignored weaker European markets and extended its gains by noon on Wednesday with solid support by rising resource counters.
The local bourse’s initial gains were due to firmer Asian markets which ignored a weaker overnight close on Wall Street.
By 11.57am the all-share index had collected 2%, led by resources, which strengthened 3,48%. Platinum stocks added 4,11% and gold stocks firmed 2,76%. Financials were up 0,42%, banks were unchanged and industrials put on 1,24%.
The rand was last bid at 10.21 to the dollar from 10,18 when the JSE closed on Tuesday, while gold was last quoted at $785,52 a troy ounce from $768,80/oz at the JSE’s last close.
The platinum price was at $826/oz, up 2,8% from its previous close of $803,50/oz and Brent crude was at $42,60 per barrel from $41,53 before.
“It’s a relatively quiet day with everyone waiting anxiously for tomorrow’s interest rates decision,” a local trader said.
“Resources have held up and are giving the market quite a nice boost,” he said.
He noted that the dollar has weakened slightly against the euro and that is why commodity prices are up.
“There is general optimism that the US automotive stimulus package will go through. Locally it’s positive sentiment ahead of the interest rates decision,” he added.
While the outcome of the MPC meeting is likely to be a close call, the consensus is for the 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.
Earlier Japan’s Nikkei was up 3,2% and Hong Kong’s Hang Seng Index was up 3,6%.
Dow Jones Newswires reports that European stocks have traded a touch lower on Wednesday, after a spate of profit warnings and layoffs announced by leading firms kept investors cautious over the health of future corporate earnings. In London, the FTSE was last down 0,57%.
US stocks are expected to jump out of the gate on Wednesday, bouncing from an overdone sell-off on Tuesday, says Mark Outten, trader at GFT Global
Markets.
He calls the DJIA to open up 139 points and the S&P 500 up 11,9 points.
On the JSE, resources giant Anglo American was up R6,49, or 3,03%, to R220,50 and BHP Billiton added R8,76, or 5,17%, to R178,25.
Petrochemicals group Sasol firmed R3,50, or 1,25%, to R283,50.
Paper group Sappi collected 50 cents, or 1,33%, to R38 and Mondi added 54 cents, or 1,66%, to R33,10.
Gold miner AngloGold Ashanti rose R11,10, or 4,55%, to R255,06, Gold Fields was up R1, or 1,15%, to R87,95 and Harmony was up R1,52, or 1,58%, to R97,57.
Anglo Platinum jumped R21,54, or 5,16%, to R439,29, Impala Platinum added R4,56, or 3,86%, to R122,56 and Lonmin collected R1,25, or 1,31%, to R97.
Among industrials, brewer SABMiller gained R3,43, or 2,03%, to R172,43, Famous Brands added 75 cents, or 5,45%, to R14,50 and Tiger Brands rose R4,85, or 3,42%, to R146,85.
Banker Absa collected R1,45, or 1,30%, to R112,95, but FirstRand gave up 28 cents, or 1,70%, to R16,15.
Financial services group Old Mutual added 18 cents, or 2,33%, to R7,90, but Sanlam was off 28 cents, or 1,52%, to R18,20.
Media group Naspers rose R6,89, or 4,10%, to R174,89.
Retailer Woolies firmed 25 cents, or 2,11%, to R12,11, Spar rose R1,16, or 2,12%, to R55,76 and Lewis collected 90 cents, or 2,16%, to R42,50.
JD Group firmed R1,58, or 5,06%, to R32,80. It was announced earlier that the Competition Commission had unconditionally approved the group’s acquisition of an additional stake in Maravedi. The furniture retailer is increasing its shareholding in the consumer finance and debtors management firm from 42,7% to 90,5%.
Construction group Aveng was up R1,08, or 3,76%, to R29,84 and the other companies in the sector were flat.
Telecommunications group MTN Group gained R1,20, or 1,25%, to R96,85 and Telkom rose R3,05, or 2,82%, to R111,31. – I-Net Bridge