Johannesburg - The JSE stayed firmer at noon on Tuesday as bargain-hunting helped prop up an otherwise panicky market. But the slightly stronger rand kept gains in check in a market that was drifting sideways, an equity analyst said.
Standard & Poor's cut its outlook on US government debt on Monday, rattling investors and sparking a huge sell-off.
By 12:07 local time, the JSE All Share [JSE:J203]
index was up 0.94%, with resources firming 0.95%, gold miners rising 0.23% and platinum counters gaining 0.30%. Industrials found 1.17%, financials picked up 0.43% and banks were 0.52% higher.
The rand was bid at 6.82 to the dollar from 6.87 at the JSE's close on Monday. Gold was quoted at US$1 494.87 a troy ounce from US$1 490.26/oz at the JSE's previous close, while platinum was at $1 786/oz, from $1 784.50/oz previously.
The sell-off was overdone yesterday, the equity analyst said. The market has rebounded on bargain hunting, but there seemed to be concerns over the European and US debt, he said.
Dow Jones Newswires reported that European stock markets moved higher on Tuesday, with strong corporate earnings from the region together with better than expected euro-zone manufacturing data offsetting the caution sparked by Standard & Poor's Monday downgrade of the US economy's outlook.
Although reverberations of S&P's move on the US economy are still being felt, the market is looking to recover from the shock and investors are demonstrating willingness to snap up stocks battered in the previous session, traders said.
Jim Reid, strategist at Deutsche Bank, said S&P's action on the US economy was just the first landmark step rather than a sign of imminent stress.
Moreover, in light of the rating agencies' patchy recent record, investor attention will soon switch away from their opinions and back to the more immediate realities of central bank policy action, said Altium Securities' strategist Ian Williams.
At 08:07 GMT, the benchmark Stoxx Europe 600 index was up 0.6% at 274.61. London's FTSE 100 index was 0.6% higher at 5 908.23, Frankfurt's DAX index was 0.5% higher at 7 059.33, and Paris's CAC-40 index gained 0.6% to 3 903.12.