JSE up as bankings shares rise

Johannesburg - South African stocks rose for a third straight session on Wednesday as banking stocks like FirstRand extended recent gains on hopes of a interest rate hike, which could boost their bottom lines.    

Twenty-three of 30 economists polled by Reuters expect the Reserve Bank to keep its repo rate at 5.5% on Thursday after lifting it by 50 basis points in January, but there is still a chance of another hike.

"If it lifts again now it will mean a lot for the margins the banks can ask in lending and this will feed to their bottom line," said Christie Viljoen of NKC Independent Economists.

FirstRand added almost 3% to R36.65, while rival Standard Bank, Africa's biggest bank by way of assets, gained 2.8% to R136.50.

"If the central bank doesn't hike though you might see a pull back in the banks," said Viljoen.

The Johannesburg Bank index, which climbed 2.75%, has now strayed into overbought territory, according to its 14-day RSI, a momentum indicator followed by some chartists. This would also suggest a correction could be on the cards.

The Top-40 index added 0.52% to 42 943.04 while the wider All-share index put on 0.56% to end the day at 47 652.89. Both indices are within close distance of recently scaled record highs.

IT firm Pinnacle Holdings extended the previous session's steep losses, shedding a further 24% to R11.45, after police said on Tuesday an executive director of the company had been charged for allegedly attempting to bribe a senior officer to win a tender for the firm.

Advancers outnumbered decliners 183 to 120 with 58 issues unchanged, according to preliminary bourse data. Around 187 million shares changed hands.