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Johannesburg - Financial shares were the big winners on Monday on the JSE as the local market was lifted by a wave of optimism that Greece and its international creditors would strike a last-minute deal that will see the Greek government avert default.
Global stocks, the euro and peripheral eurozone bonds all rose on Monday in anticipation of a breakthrough in talks taking place later in the day.
READ: Signs of last-minute Greece deal boost markets
The Financial index has been under pressure lately despite being oversold. This is because any fallout over the Greek crisis will hit this sector the hardest, despite the fact that South African institutions have no direct exposure to Greece.
However, by midday on Monday the Financial index was 1.72% higher with major bank and insurance companies all performing strongly.
Financial stocks also pulled the rest of the market higher, with the All-share index trading 0.73% higher at 52 184. The Top 40 index was at that stage 0.87% better at 46 572.
The prospects of a deal over Greece’s debt also improved emerging market sentiment, and there was strong interest in the big double-listed shares on the JSE with worldwide business interests so popular among foreign investors.
The Industrial index was 0.84% higher, but the Resources index did not share in investors' enthusiasm and lost 0.61%. The Gold index dropped sharply due to a lower gold price and traded 4.56% softer. The sector was also hampered by uncertainty over the latest wage talks in the gold industry which started on Monday.
Greek Prime Minister Alexis Tsipras met the heads of the European Commission, European Central Bank and International Monetary Fund on Monday, ahead of a summit of eurozone leaders aimed at reaching a deal over debt talks.
The chief of staff to European Commission president Jean-Claude Juncker called the latest proposals from Greece a "good basis for progress", while EU Economic Commissioner Pierre Moscovici said he was "convinced" agreement would be reached.
"The most likely outcome, with a 75% probability, is a deal," Credit Suisse said in a note.
Markets worldwide traded stronger, with German stocks 2.5% higher.
Among local banking shares FirstRand [JSE:FSR] traded 2.58% higher at R52.39 and Barclays Africa [JSE:BGA] was 2.16% stronger at R177.59. FirstRand lost 6.52% over the past 30 days and Barclays Africa is 8.13% lower over that period, after losing 4.78% over the past seven days.
Standard Bank [JSE:SBK], which lost more than 11% of its value over the past 30 days, was by Monday midday 1.52% stronger at R154.60.
Among the insurers MMI Holdings [JSE:MMI] was one of the biggest movers of the day and traded 3.75% higher at midday at R29.35. The share reached a 52-week high of R34.75 on April 12 this year, but has dropped sharply since then and gave up more than 14% of its value over the past 30 days.
Sanlam [JSE:SLM] was also 2.03% higher at R67.77. The share traded as high as R81.01 on April 9 this year before the correction in the financial sector started. The stock lost 10.99% over the past 30 days.
Among the big industrial shares with business interests worldwide Naspers [JSE:NPN] gained 2.03% to R1 908.00, but Steinhoff [JSE:SHF] lost 1.8% to R79.00. SABMiller [JSE:SAB] was 1.39% stronger at R654.14 and British American Tobacco [JSE:BTI] traded 1.16% higher at R692.00.
In the resources sector ArcelorMittal [JSE:ACL] and African Rainbow Minerals [JSE:ARI] both reached new 52-week lows, and both these shares are now more than 55% lower over the past year. ArcelorMittal lost 3.86% to R13.94 and African Rainbow Minerals traded 1.28% weaker at R88.11.
AngloGold Ashanti [JSE:ANG], one of the most volatile shares in the volatile gold sector, lost 5.56% on Monday morning to trade at R11.23. The share is now 11.66% lower over the past 30 days.
Gold Fields [JSE:GFI] lost 3.83% to R37.69. The company said on Monday morning the US Securities Exchange Commission will not recommend that enforcement action be taken against Gold Fields over a 2010 black economic empowerment deal.
