Publications
Partners
Johannesburg - The JSE was firmly ensconced in the black in the noon session on Wednesday, buoyed by rising commodity prices and firm world markets as global risk appetite returned after the recent sell-off sparked by the Egyptian political crisis.
By noon local time, the JSE all share index was up 1.33%, with a 2.11% rise in resources spearheading the rally. Platinum miners were up 1.58% and gold miners 0.82%.
Industrials advanced 1.22%, but banks collected a meagre 0.08% and financials were down 0.14% - the singular blot on an otherwise clean slate.
The rand was trading at 7.12 to the dollar from 7.15 at the JSE's close on Tuesday. Gold was quoted at US$1 336.62 a troy ounce from US$1 330.68/oz at the JSE's previous close, while platinum was at $1 830/oz from $1 804/oz before.
A local trader said risk aversion appeared to be receding, with President Hosni Mubarak's undertaking to relinquish the Egyptian presidency in September.
He added that good US earnings reports, favourable economic news in the form of strong PMI data, not only from SA but elsewhere in the world, and rising commodity prices were all offering support to the JSE. Copper was at a record high and that was also feeding through to other commodities, he added.
"We are looking at good risk appetite coming back into the market - the strong commodity prices are spilling over into commodity shares," he said.
"Commodities like your Anglos and Billitons are leading the pack. But we're also seeing some bargain hunting after the sell-off over the last few days," another trader added.
Dow Jones Newswires reports European stocks markets edged higher Wednesday, as concerns about the unrest in Egypt, although still present, have started to ease. At the same time, optimism about global economic growth is rising.
By 0915 GMT, the Stoxx Europe 600 index was 0.3% higher at 282.99, London's FTSE 100 index was up 0.7% at 6001.53, the CAC-40 index in Paris added 0.1% at 4073.97, while the DAX index in Frankfurt was 0.1% higher at 7192.25.
The bullish mood early Wednesday was supported by the strength in Tuesday's global purchasing managers' index surveys and the U.S. Institute of Supply Management manufacturing data, which all demonstrated that the global economy has strong momentum at the moment. This helped push commodity prices higher and in turn lifted the Stoxx Europe 600 basic resource index up by 1.5%.
The headline ISM is at levels not seen since 2004 and the correlation of the returns from the Standard & Poor's 500 and the ISM suggest that the strength of manufacturing growth in the U.S. economy is consistent with further positive progress for equities, said Gerard Lane, strategist at Shore Capital.
Meanwhile, Asian stock markets ended higher Wednesday on solid Wall Street gains, with automakers and resource-sector shares supporting the Tokyo market. Shares in Sydney were higher but gains were capped by a drop in insurance and transport companies as a severe cyclone approached Queensland state.
The Nikkei Stock Average climbed 1.8% in Tokyo for its best percentage gain since early December, Australia's S&P/ASX 200 added 0.9% and Hong Kong's Hang Seng index finished the day up 1.8%. India's Sensex rose 1.3% in afternoon trade.
Stock markets in South Korea, China, Taiwan and Vietnam were closed for the Lunar New Year holidays this week, while those in Hong Kong were open for a half-day. Dow Jones Industrial Average futures were up eight points in screen trade.
The region-wide rally came as regional sentiment got a fillip after the Dow Jones Industrial Average closed above the 12,000 mark for the first time in two-and-a-half years Tuesday, buoyed by encouraging earnings and manufacturing data.
