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Rally in miners pushes JSE firmer

May 30 2013 18:15 I-Net Bridge

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Johannesburg - The JSE closed higher on Thursday as a rally in gold counters and a weaker rand buoyed the bourse.

The rand dropped below R10/$ due to a sell-off in global commodity currencies‚ which underpinned local rand hedge counters‚ pushing the JSE up.

Bargain-hunting after recent pullbacks also supported the local bourse.

At 17:00‚ the JSE All Share [JSE:J203] index ended 1.72% higher at 41‚941.88 points‚ with the Top 40 - (Tradeable) [JSE:J200] blue chip index adding 2.07% to 37 500.78 points.

The gold index soared 11.14% on firmer metal prices and a weaker rand.

Platinums surged 5.34% and resources garnered 4%.

The spot gold price was 1.79% firmer at $1‚415.99/oz at 5pm local time.

A downward revision of US first-quarter gross domestic Product (GDP) figures and another steep fall in the Japanese market spurred investor demand for gold as a safe-haven investment.

The Japanese Nikkei 225 lost more than 5% on Thursday‚ extending recent major falls on Eastern monetary stimulus concerns.

Spot platinum was 1.76% firmer at $1‚475/oz.

“We saw a spectacular one-day move in the gold index which is attributable to the higher gold price. When the rand broke through the R10 to the dollar level‚ some stop-losses were triggered … which exaggerated gold counter moves‚” said Ryan Wibberley‚ head of equity dealing for emerging markets at Investec Asset Management in Cape Town.

“The gold index was only up 0.9% last month‚ so today’s upward surge comes after gold (shares) had been heavily sold off‚” he said.

Major European markets were trading in the black in late-afternoon trade‚ with London’s FTSE 100 gaining 0.35% at 4.48pm local time and the Dow Jones Industrial Average was 0.43% higher.

US stocks edged higher on Thursday as investors looked through a pair of soft economic readings and considered the potential for continued central bank stimulus‚ Dow Jones Newswires reported.

On the economic front‚ a second take on first-quarter GDP showed a slight dip in growth to 2.4%‚ from an initial estimate of 2.5%‚ matching economists’ expectations.

The strength of US growth is in sharp focus after Federal Reserve Chairman Ben Bernanke indicated that the central bank could pare back its stimulus efforts should the economy continue to show signs of improvement‚ the newswire reported.

Meanwhile‚ the number of US workers seeking unemployment benefits rose more than expected and for the third time in four weeks.

Initial jobless claims increased by 10 000 to a seasonally adjusted 354 000 last week‚ versus expectations for 340 000 new claims.

Among individual shares on the JSE‚ Anglo American (AGL) advanced 4.33% to R237.15 and rival BHP Billiton (BIL) lifted 3.76% to R295.

Rand hedges SABMiller (SAB) gained 2.05% to R512.50‚ British American Tobacco (BTI) added 2.68% to R555.76 and Compagnie Richemont (CFR) gained 2.03% to R91.11 due to the weaker rand.

Harmony led the gains among bullion counters‚ surging 16.73% to R41.09‚ Gold Fields (GFI) jumped 10.28% to R62.20 and AngloGold Ashanti (ANG) picked up 10.63% to R175.95. Sibanye (SGL) rose 8.03% to R8.07.

Lonmin (LON) led the upside in the platinum gauge‚ adding 9.37% to R43.77‚ followed by Anglo American Platinum (AMS) up 7.38% at R320.

Retailer The Foschini Group (TFG) ended 2.68% firmer at R111 after reporting an 11.2% rise in headline earnings per share to 858.6c for the year ended March.

Growthpoint Properties (GRT) ended 4.10% softer at R25.75 after announcing on Thursday the withdrawal of its offer for Fountainhead Property Trust’s assets. Fountainhead (FPT) lost 6.05% to close at R8.39 and Redefine (RDF) gave back 4.99% to end the day at R9.90.

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