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Johannesburg — The JSE closed the Monday session firmly stronger following in the footsteps of European and US markets‚ with the German Dax and Paris CAC both trading more than 2% higher and the Dow Jones gaining more than 1% by late morning.
At 17:00‚ the All Share [JSE:J203] index was 1.12% higher at 37 229.64 points‚ with the Top 40 - (Tradeable) [JSE:J200] index adding 1.25% to 33 020.13 points. The platinum sector surged 5.03% and resources added 2.05%.
“There are no specific headlines driving our market higher. We have a reasonably strong platinum and gold price. It was a good start to the week‚ after last week’s volatility‚” a local trader said.
Positive market sentiment led all major European bourses higher on Monday afternoon‚ with the UK’s FTSE 100 seen 1.71% stronger at 16:49 local time‚ as market concerns over the US fiscal cliff waned after talks to resolve the issue.
US stocks opened the week with firm gains while investors look ahead to a potential deal on Capitol Hill that could avert a hit to US economic growth in the new year‚ Dow Jones Newswires reported.
The Dow Jones Industrial Average climbed 0.71% at 16:49 local time to snap a four-session losing streak.
President Barack Obama‚ in Bangkok for a three-nation trip‚ said he was confident the fiscal situation could be dealt with by lawmakers.
“Markets are trading with a positive tone in European trading hours‚ with equities stronger and the euro and risky currencies generally stronger versus the dollar‚ despite event risks in Europe. In the Eurogroup meeting today at 16:00 London time‚ the eurozone finance ministers‚ the ECB and the IMF will meet to try to overcome their differences on Greece‚” Barclays said in its global daily note.
“We think the US fiscal cliff will continue to be a dominant theme in the market into the year-end. The possibility of higher dividend taxes in the US appears to be taking a toll on high dividend yielding stocks‚ with the highest yielding stocks atypically underperforming in a sharply down market. We expect speeches in the coming weeks to begin to stabilise these stocks‚” Barclays said.
