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Johannesburg - The JSE strengthened on Monday morning after a deal was reached between Greece and the eurozone on negotiations for a new bailout package for the debt-ridden Geek government.
READ: Eurozone clinches deal with Greece after all-night haggle
The market was however not on an exuberant run but moved cautiously after a strong opening, as many bridges still have to be crossed before a solution can be found for the economic crisis in Greece.
Although the Greek government has agreed to strict austerity measures, the Greek parliament must approve legislation to implement these measures by Wednesday for the negotiations on a new bailout package to start.
These measures will be met with stiff resistance by members of the leftist ruling party and could lead to the fall of the Greek government and new elections later this year.
The JSE opened strongly but major indices then mostly moved sideways. The All-share index was at that stage at 52 187 points, 0.75% higher than Friday’s closing level but 1 point lower than the opening 52 188 points.
All the major indices were higher at that stage, with the exception of the Gold index which traded 0.47% lower than Friday.
The Financial index continued its run and at midday was another 1.07% higher, with the Industrial index gaining 0.89% and the Resources index 0.83%.
The JSE took its lead from the European markets which strengthened on the prospects of a deal with Greece, while Asian markets were also higher. They markets were further supported by the continuing recovery of the Chinese markets, which were almost 3% higher again due to support measures the Chinese government announced last week.
Stronger markets in China and Hong Kong was once again good news for Naspers [JSE:NPN], which owns 34% of Chinese internet giant Tencent. Naspers traded 1.01% higher at R1 837.26. The other giant in the industrial sector, SABMiller [JSE:SAB], was 0.94% stronger at R668.03.
In the financial sector FirstRand [JSE:FSR] continued its strong run, trading 1.37% stronger at R54.09.
The top shares in the resources sector, BHP Billiton [JSE:BIL] and Anglo American [JSE:AGL], were also higher by midday. Anglo, which last week traded at a 52-week low, gained 1.70% to R168.84 and BHP Billiton was 0.83% stronger at R238.71.
The resources sector is still hampered by platinum shares trading at historical lows due to the low platinum price, which is currently at 2009 levels. Platinum traded another 0.24% lower at $1 029 per ounce.
The biggest loser was once again Lonmin [JSE:LON], which slipped another 8.49% on Monday morning after plunging 11.32% on Friday when Citigroup cut its price target for the dual-listed share and UBS downgraded the stock to “sell”.
The share is now at the lowest level since its listing in 1982 and is 61.1% down for the past 12 months. The stock lost 22.86% of its value over the past week and 39.50% over the past 30 days.
Impala Platinum (Implats) [JSE:IMP] and Royal Bafokeng Platinum [JSE:RBP] are also at 52-week lows. Implats lost another 0.61% to R48.70 and Royal Bafokeng was 3.66% lower at R39.50.
Anglo American Platinum [JSE:AMS] was however higher at R257.15 after the company said on Monday it expected its interim earnings to rise by almost 1 500% as it recovers from a five-month strike last year and benefits from an after-tax gain. The results will be released next Monday.
Headline earnings per share were expected to come in between 940 and 950 cents, an increase of almost 1 500%, but 600c of that can be attributed to an increase in the estimate of the quantity of metals in its inventory.
Kumba Iron Ore [JSE:KIO] traded 1.23% lower at R120.05. The National Union of Mineworkers said on Monday its members would stop work if the company goes ahead with plans to cut up to 175 jobs, most of them at its Sishen mine.
