Johannesburg - South African markets received a
boost on Thursday as global investor sentiment improved following a move
by central banks to pump U.S. dollars into the European financial
Central banks including the U.S. Federal Reserve and European
Central Bank earlier Thursday announced plans to conduct three U.S.
dollar liquidity-providing operations. The move eases recent worries
about a dollar-funding shortage among European banks, after U.S. money
market funds reduced deposits significantly in Europe.
The JSE finished the day firmly in the black on the back of positive sentiment emanating from European markets.
A local trader said that markets were healthy during the day
due to a good futures close out, but the JSE had been kept aloft in late
trading by European markets.
"The ECB is looking like they're making more progress on
combined decisions and the market is taking this to heart. Overseas
bonds are under a bit of pressure perhaps suggesting some increased risk
appetite", the trader said.
By 17:00 local time, the JSE All Share [JSE:J203]
index had picked up
1.77% to 30 998.05. Platinum led gains up at 2.54%, resources picked up
2.11%, however gold stocks weakened 1.04%. Industrials generated 1.79%,
financials were up 1.35% and banks rose 1.27%.
The rand was bid at 7.41 to the dollar, from 7.38 at the JSE's
close on Wednesday. Gold was trading at $1 776.18 a troy ounce from $1 823.40 at the JSE's previous close, while platinum was at $1 783/oz, from $1 813.50/oz previously.
Bonds were up to 13 basis points firmer in late trade on
Thursday, on the back of comment from the ECB that it would move to
improve dollar liquidity.
According to Dow Jones, the ECB's Governing Council "has
decided, in coordination with the Federal Reserve, the Bank of England,
the Bank of Japan and the Swiss National Bank, to conduct three US
dollar liquidity-providing operations with a maturity of approximately
three months covering the end of the year," the ECB said in a statement.
By 18:00, the benchmark R157 bond was trading at 6.810%, from
its previous close of 6.940%. The R207 was bid at 7.930% and offered at
7.910% from 8.050% and the R186 was trading at 8.180% from its close of
"We're quite a bit firmer; it has a lot to do with the ECB Fed
comment on joint coordinated efforts to help bailout the EU. Whatever
short positions were taken on the South African market seems to have
turned around fairly quickly, both on the currency and the bonds," said a