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Johannesburg - The JSE rebounded strongly on Tuesday, with resources leading the upside and global stocks boosting sentiments on the local bourse.
Resource counters led the upside, Andrew Todd, equity derivatives trader at Imara SP Reid, said. Following overreaction yesterday, when the JSE fell 1.06%, the domestic exchange staged a strong rebound, Todd said.
At 17:00 local time, the JSE all share index was up 0.75%, with resources firming 1.45%, platinum miners gaining 1.07%. But gold miners ended flat on the day. Financials rose 0.19%, banks picked up 0.37% and industrials were up 0.33%.
The rand was trading at 6.86 to the dollar from 6.88 the JSE's close on Monday. Gold was quoted at US$1 369.41 a troy ounce from $1 361.08/oz at the JSE's previous close, while platinum was at $1 823.70/oz from $1 808.00/oz before.
Earlier, an equity trader said the JSE dropped sharply due to one big order in thin trade on Monday as the US market was closed for the Martin Luther King Day holiday in the US. "Yesterday's move was unwarranted," he said.
Todd said sentiment remained good with global stocks looking stronger.
He said the market was waiting for US earnings reports. "After earnings, we will wait to see what the next catalyst will be," he said.
Dow Jones Newswires reports that US blue-chip stocks rose on Tuesday while the broader market wobbled as industrials gained following encouraging manufacturing data, but bank stocks weakened after disappointing earnings from Citigroup.
The Dow Jones Industrial Average rose 30 points, or 0.3%, to 11 817.
However, sentiment surrounding the fragile euro zone strengthened after a successful Spanish debt auction, and the euro climbed, buoyed by strong German economic data and reports that Russia may buy Spanish government bonds.
The euro was trading recently at $1.3382, up from $1.3284 late on Monday in New York. The US Dollar Index, which tracks the currency against a basket of others, fell 0.6%.