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Johannesburg - Dovish comments by the chairperson of the Federal Reserve on further stimulus for the US economy not only gave Wall Street a boost on Monday evening, but also improved sentiment towards emerging markets.
Local markets surged, with the All-share index on the JSE on a new record level well above 48 000 points.
At midday the All-share index on the JSE was 0.74% higher on 48 123, while the Top 40 index improved 0.81% to 43 334. The resources index, which was 1.23% higher, and the industrial index, which rose 0.78%, were the best performers.
The market sentiment was also improved by the big turnaround of tech stocks after last week’s sell-off, which started in New York on Monday evening and continued on Tuesday morning in Hong Kong, where the Hang Seng index rose 1.3% to reach the highest level in three months.
Tencent is star performer
The star performer was Tencent Holdings, China's biggest internet company, which gained 3.9% after losing 7.8% last week in the global sell off.
On the JSE Naspers, which owns a stake of 34% in Tencent, improved as expected and at midday was 2.32% higher on R1188.30 after reaching R1195.50 earlier in the day.
The big news was comments from the US Federal Reserve chairperson Janet Yellen, who insisted that policy in the US will remain extremely accommodative for a long time to come. She said "considerable" slack still exists in the US job market, and further monetary stimulus could be effective in supporting the world's biggest economy.
The Fed is busy tapering its monthly purchases of US bonds and analysts do not think her comments mean that this process will stop. Rather, her speech is seen as an effort to fight back against market expectations that the Fed will raise interest rates in the US as early as the second quarter next year.
Interest rates in the US are at record lows, which supports emerging markets as investors are looking for better yields.
The latest news on the Chinese economy is mixed. The official Chinese PMI in March of 50.3 was up from the 50.2 in February. However‚ the HSBC index was revised down from 48.5 to 48.0.
Rand Merchant Bank said in a note on Tuesday morning that a slowdown in China’s economy is still a real possibility‚ but at least there is some evidence suggesting it is not happening quite yet.
That was obviously good news for resources stocks. The star performer was BHP Billiton which overshadowed its big rival Anglo American. BHP added 2.68% to R333.99, while Anglo could only rise 0.69% to R270.47. BHP Billiton is highly dependent on the Chinese market for some its commodities.
So too is Kumba Iron Ore, which improved by 0.88% to R381.36.
MTN, one of the two major cellphone operators which heard on Monday that their termination rates to carry call from other operators will be cut by more than half from Wednesday, recovered in the morning after the previous day’s sell-off.
By midday the share was 1.03% higher on R217.77 after losing more than 2% on Monday. Vodacom, which lost more than 1% on Monday, was a further 0.18% lower on R129.76.
- Fin24
Local markets surged, with the All-share index on the JSE on a new record level well above 48 000 points.
At midday the All-share index on the JSE was 0.74% higher on 48 123, while the Top 40 index improved 0.81% to 43 334. The resources index, which was 1.23% higher, and the industrial index, which rose 0.78%, were the best performers.
The market sentiment was also improved by the big turnaround of tech stocks after last week’s sell-off, which started in New York on Monday evening and continued on Tuesday morning in Hong Kong, where the Hang Seng index rose 1.3% to reach the highest level in three months.
Tencent is star performer
The star performer was Tencent Holdings, China's biggest internet company, which gained 3.9% after losing 7.8% last week in the global sell off.
On the JSE Naspers, which owns a stake of 34% in Tencent, improved as expected and at midday was 2.32% higher on R1188.30 after reaching R1195.50 earlier in the day.
The big news was comments from the US Federal Reserve chairperson Janet Yellen, who insisted that policy in the US will remain extremely accommodative for a long time to come. She said "considerable" slack still exists in the US job market, and further monetary stimulus could be effective in supporting the world's biggest economy.
The Fed is busy tapering its monthly purchases of US bonds and analysts do not think her comments mean that this process will stop. Rather, her speech is seen as an effort to fight back against market expectations that the Fed will raise interest rates in the US as early as the second quarter next year.
Interest rates in the US are at record lows, which supports emerging markets as investors are looking for better yields.
The latest news on the Chinese economy is mixed. The official Chinese PMI in March of 50.3 was up from the 50.2 in February. However‚ the HSBC index was revised down from 48.5 to 48.0.
Rand Merchant Bank said in a note on Tuesday morning that a slowdown in China’s economy is still a real possibility‚ but at least there is some evidence suggesting it is not happening quite yet.
That was obviously good news for resources stocks. The star performer was BHP Billiton which overshadowed its big rival Anglo American. BHP added 2.68% to R333.99, while Anglo could only rise 0.69% to R270.47. BHP Billiton is highly dependent on the Chinese market for some its commodities.
So too is Kumba Iron Ore, which improved by 0.88% to R381.36.
MTN, one of the two major cellphone operators which heard on Monday that their termination rates to carry call from other operators will be cut by more than half from Wednesday, recovered in the morning after the previous day’s sell-off.
By midday the share was 1.03% higher on R217.77 after losing more than 2% on Monday. Vodacom, which lost more than 1% on Monday, was a further 0.18% lower on R129.76.
- Fin24
