Early gains for JSE after G20 eurozone pledge

The JSE made early gains in morning trade on Monday, spurred by positive intent shown by European ministers to address the debt crisis in the eurozone at a G20 meeting in Paris over the weekend.

By 9.10am local time, the JSE all-share index improved 0.81%. Gold gathered 1.71%, while platinum miners generated 1.37%, along with resources, 1.07%. Financials rose 0.77%, banks landed 0.69%, and industrials lifted 0.56%.

The rand was bid at 7.80 to the dollar, from 7.85 at the JSE’s close on Friday.
Gold traded at $1 682.36 a troy ounce from $1 671.60/oz at the JSE’s previous close, while platinum was at $1 548.50/oz, from $1 551.70/oz previously.

A dealer said that the local market was taking direction from follow through on US trade on Friday and in overnight trade in Asia. He noted that a group of G20 ministers highlighted October 23 as a date to address the European debt crisis, and hopefully avoid a European economic meltdown.

Dow Jones Newswires reported that European stock markets were seen higher on Monday, helped by gains across Asian markets as investors responded positively to news that European leaders vowed to their group of 20 partners at the weekend to take swift and decisive action on tackling the debt crisis.

Addressing challenges
Finance ministers and central bankers from the G20 industrial and developing economies, after concluding their gathering on Saturday, said they expected an October 23 meeting of European leaders “to decisively address the current challenges through a comprehensive plan”.

Markets had largely viewed policy makers as two steps behind the European sovereign debt crisis but confidence in their ability was perking up as it appeared they were finally getting to grips with the crisis and bringing it to a conclusion, said Jonathan Sudaria, dealer at Capital Spreads.

“Although thin on details, the G20 communiqué has built up expectations that by this weekend’s European Council summit, the ‘comprehensive plan’ will be finalised and a solid line will be drawn in the sand,” he added.

Asian markets responded strongly on Monday to the G20 meeting over the weekend. Japan’s Nikkei Stock Average was up 1.5%, Australia’s S&P/ASX 200 rose 1.7%, while South Korea’s Kospi Composite advanced 1.3% and Hong Kong’s Hang Seng was 1.2% higher.

On the JSE, Anglo American was R2.01 better off to R297.50, Sasol gained R1.75 to R351.25, and BHP Billiton lifted R2.23 to R244.50.

Among gold shares, AngloGold Ashanti secured R5.20 or 1.58% to R333.70, GoldFields pocketed R2.59 or 2.18% to R121.60, and Harmony found R1.45 or 1.51% to R97.35.

Metal stocks
Gold One International, the dual-listed Australian and South African gold company, on Monday reported a 23% increase in quarterly production to 35 128 ounces—which exceeds the company’s guidance of 34 000 ounces.

This brings year-to-date production to 89 827 ounces and means the company is on track to meet its production target of 120 000 ounces for 2011. The group’s shares were relatively flat, adding 3c to R4.30.

In platinum stocks, Amplats rose R4.49 to R556.50, Impala Platinum edged up R3.46 or 2.04% to R172.97, and Northam Platinum advanced 98c or 3.17% to R31.86. Lonmin gathered R2.39 or 1.76% to R138.44.

Among other miners, Kumba Iron Ore added R10.06 or 2.10% to R488.24, Exxaro profited R3.89 or 2.20% to R180.99, and African Rainbow grabbed R5.00 or 2.78% to R185.

Assore (ASR) gained R4.58 or 2.30% to R203.59, and steel group Arcelormittal lifted 97c or 1.53% to R64.20.

In industrial stocks, Bidvest picked up R1.96 or 1.27% to R155.97.

In the telecoms sector, shares in Telkom, Africa’s largest integrated communications company, climbed 64c or 1.95% to R33.49, Vodacom improved R1.84 or 2.08% to R90.36, and MTN Group (MTN) increased R2.29 or 1.75% to R133.49.

ICT and telecommunications group Altech found R1.04 or 1.85% to R57.20.

Retailers saw JD Group improve R1.15 or 2.82% to R41.90, and Truworths rise R1.12 or 1.55% to R73.31. Massmart found R2.35 or 1.60% to R148.85, but Foschini Group handed back R1.44 or 1.58% to R89.45.

Media group Naspers was R3.58 richer to R363.53, but Avusa surrendered R1.25 or 5.26% to R22.50, in light trade a dealer said.—I-Net Bridge

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