Johannesburg - The JSE pared gains in late trade on Monday‚ but still closed in positive territory with industrials leading the way for most of the day. This was due to strong performances from counters such as Richemont and Vodacom‚ while platinums gave back 1.79% due to continued labour woes in the industry.
At 17:00‚ the JSE All Share [JSE:J203] index closed 0.32% higher at 37 463‚20 points‚ with the Top 40 - (Tradeable) [JSE:J200] index adding 0.37% to 33 244.66 points. The industrial index closed 0.87% higher‚ while gold shares gave back 0.48%.
“Industrial counters Richemont and Vodacom were large contributors today‚ with both up by more than 4% due to Richemont releasing strong results on Friday and Vodacom producing very strong interim results today‚ above expectations‚” said Jean Pierre Verster‚ analyst at 36ONE Asset Management in Johannesburg.
Leading European bourses were mixed‚ with London’s FTSE 100 0.18% higher at 17:00‚ while the Paris CAC 40 was down 0.25%.
Markets were relatively quiet with it being Veterans Day in the US. At 17:00 local time the Dow Jones Industrial index up slightly (0.11%) at 12 829‚36 points as investors took an optimistic view of a burst of corporate deals and Greece’s passage of a budget key to freeing up funds for the cash-strapped nation‚ Dow Jones Newswires reported. Monday’s gains followed the market's worst weekly performance in more than five months last week.
The fiscal cliff problem in the US remains unsolved‚ but some sort of solution is expected‚ although it might not necessarily ease market concerns‚ Standard Bank said in a note.
“What we have to bear in mind is that the cliff poses two risks to the US and global economy. The first is that the scale of fiscal tightening is so large that it pushes the US into recession and so damages the rest of the world‚” the bank said.
“But there is also what we might call an expectations risk here. This is where the cliff is avoided‚ but the manner of its avoidance still fractures financial markets. This could happen‚ for instance‚ if Congress cobbles together a very poor deal‚ at the last possible moment‚ that merely kicks the can down the road‚” it said.
“What is more‚ we actually feel that this sort of expectations shock‚ as opposed to the real shock of the US falling over the cliff‚ poses greater risks to the rest of the world than the US. With this in mind‚ we would tend to approach this period with more trepidation for non-US markets‚ than US markets‚” it added.