Johannesburg - South African stocks remained strong, but were off their best levels by midday on Thursday, moving in line with stronger Asian and European markets.
Asian and European markets ignored the 0.82% fall in the Dow overnight despite the decision by the Fed to cut interest rates by half a basis point.
By 12:01, the JSE's all share index had gained 3.55%, held up by gold stocks, which were up 6.82%, resources which gained 4.98% and platinum miners, which added 3.51%. Banks gained 4.54%, financials were up 3.91% and industrials put on
2.05%.
The rand was bid at R9.79 to the dollar from R9.93 when the JSE closed on Wednesday, while gold was last quoted at $767.95 a troy ounce from $766.35/oz at the JSE's last close.
The platinum price was at $860/oz, jumping 8.38% from Wednesday's close of $793.50/oz. Brent crude was at $66.35 from its previous close of $65.47.
A local equities trader said the JSE was being held up by stronger commodity prices, with gold and platinum prices rising nicely.
"We are likely to see a bit of a pause at these current levels," the trader said.
Other markets encouraging
"The weaker dollar is still a factor and we have seen that markets firm in reaction to that. It's looking better. Markets are bound to rally after the recent knocks," he added.
"The big question now is whether markets will run too much, too quickly," the trader added, pointing out that volatility will still remain an important market factor.
Asked which stocks were holding up nicely, the trader said: "It's a fairly broad based increase. Banks are up nicely as well as industrials."
"We are seeing the like of Mondi losing a bit and that is probably just on the stronger rand," he added.
Dow Jones Newswires reports that Asian investors cheered global efforts to deal with the credit crisis and slowing world economy, sending markets up sharply on Tuesday in Tokyo, Hong Kong and Seoul.
Tokyo rose 10% due to the global efforts and a further drop by the yen against the euro, easing profit pressure on Japan's exporters. Hong Kong jumped 12.8%, marking its third double-digit percentage move this week, sparked by rate cuts in China and the US.
Other markets were encouraging. The Dow Jones Stoxx 600 Index was 1.3% higher at 216.58 on Thursday morning. In the US, Nasdaq 100 futures were quoted up 3.4% and DJIA futures added 292 points after Wednesday's modest overnight 74.16-point drop.
European stocks are higher as investors embrace the Fed's 50 bps interest rate cut, and hope it prompts the BOE and ECB to follow suit.
US stocks are picked to open on a bright note as the Federal Reserve's rate cut overnight encourages a move from cash into equities as investors seek out yield. Spreadbettor CMC Markets picks the DJIA to open up about 115 points at 9105.96, while Nasdaq is called 16 points higher at 1673.21. S&P 500 is seen 17.9 points to the good at 947.99.
- I-Net Bridge