Share

Bad US news good for JSE

Johannesburg - Bad news about the American economy seems to be good news for the JSE.

The major indices on the JSE, except the financial index, were sharply higher on Monday morning after Friday’s announcement that the latest jobs data in the US was far below expectations.

At midday the all share index was 1.04% higher on 45 811 points and the Top 40 index traded 1.10% higher at 41 225 points. The financial index was slightly lower after a particularly strong run on Friday.

The US data on Friday was so disappointing that it sparked fears the recovery of the American economy is slowing down and some commentators think that the biggest economy in the world is now facing a long period of slow growth.

Slow growth in America, and particularly in job creation, might force the Federal Reserve to rethink its policy to ease back on its economic stimulus programme.

This is good news for local investors. The tapering led to massive capital outflows from emerging markets around the world which put the their stock markets and currencies under severe pressure

Just 113 000 jobs were added in January, the US government said on Friday. In December, employers had added 75 000. Job creation for the past two months is roughly half its average for the past two years.

A third sluggish jobs report in February would further dim hopes for an acceleration in economic growth. The market expected more than 180 000.

Former Treasury Secretary Larry Summers had suggested in November already that the economy might be trapped by "stagnation". By that, he meant a prolonged period of weak demand and slow growth.

The recovery on the JSE was also in line with evidence of bargain hunting from an oversold position, but the extent of the recovery surprised some commentators.

Imara SP Reid said in its morning watch the closing levels on Friday of the all share index and the Top 40-index were slightly more substantial than had been forecast. This morning it strengthened even further.

The resources index broke easily through the expected resistance level of 54 240 and at midday  was 2.2% higher at  54 882 points. Anglo American [JSE:AGL] traded 3.04% higher at R273.31, while Sasol [JSE:SOL] added 0.88% to R530.38.

The gold index was more than 4% higher by midday and Anglo Gold Ashanti [JSE:ANG] traded 4.17% higher at R685 and Harmony [JSE:HAR] 5.18% higher at R30.45.


We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders