Banks lead SA stocks higher

Johannesburg - South African banks such as fourth-largest lender Nedbank followed their European counterparts to close higher after a successful Spanish bond auction generated market optimism and buoyed stocks on Thursday.

Spain raised €10bn earlier on Thursday, twice as much as planned at lower yields. Italy also fared well, paying less than half what it did a month ago to sell one-year bills.

“A good bond auction like that is the main reason for our market picking up initially,” said Byron Lotter, a portfolio manager at Vestact Asset Management.

Johannesburg’s Top 40 - (Tradeable) [JSE:J200] index gained as much as 0.94% but retraced its steps to close 0.54% higher at 29 434.13, after US jobless claims came in higher than expected.

The All Share [JSE:J203] index added 0.55% to 33 008.52. The JSE’s banking index gained over 1.3% after Nedbank rose 2.4% to R151.10.

Nedbank shares shrugged off news that bigger rival Absa was dragging it to court over $95m in losses it incurred in single stock futures trades. Absa added 1.8% while fellow competitor First Rand closed nearly 2% stronger.

Construction and mining equipment leasing company Eqstra surged over 4% to R7.71 after announcing that talks to dispose its mining unit were progressing well.

Clothes and household merchandise retailer Mr Price Group touched a record high of R86.46 after booking a 16% rise in third-quarter sales. The stock closed 2.45% stronger at R86.30.

Preliminary exchange data showed 167 million shares had been traded, but the figure is likely to rise. Another 209.3 shares were sold on Wednesday.