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Johannesburg - A relief rally in the share price of the South African media giant Naspers [JSE:NPN] has supported the local stock market in the morning trade on Tuesday.
Shortly after 12:00, Naspers traded at R1 065.50, which is R30.87 or 2.98% higher than the previous day. Initially Naspers made up more than 50% of the volumes traded.
The recovery in the Naspers share price, which lost more than 9% of it value over the previous two sessions, was driven by a recovery of its associate company Tencent‚ an internet giant in China‚ which recorded a gain of more than 3% in Hong Kong.
Tencent, which is over 30% owned by Naspers, fell over 2% on Monday after shedding 4% on Friday, as Hong Kong stocks continued to fall amid an emerging market sell-off.
The All Share index opened higher on Tuesday, but was down 0.18% at midday from Monday's close as traders remained cautious ahead of the start of the US Federal Reserve’s two day policy meeting later in the day.
Uncertainty about the Federal Reserve’s easing of support for the US economy is one of the reasons for the big sell-off in emerging markets and the weakening of the currencies of those markets.
Expectations are that the Federal Reserve will trim its bond repurchase programme by a further $10bn per month, but some commentators are interested to see if the Fed has taken into account the effect that its monetary easing has had on emerging markets.
The rand was also little changed as traders awaits the outcome of central bankers’ meetings on Tuesday and Wednesday.
Besides the meeting of the Federal Reserve today and tomorrow, Turkey’s central bankers called for an emergency meeting later today to ensure price stability for the lira. The South African Reserve Bank is also due to announce its rate decision on Wednesday.
At 08:36‚ the rand was at R11.032 to the dollar from its overnight close of R11.0700. It touched R11.25/$ on Monday.
On the JSE, gold mining stocks recorded the biggest losses‚ with the index falling 2.86% after strong gains in recent sessions.
Gold Fields South Africa [JSE:GFI] traded R32.07 or 2.54% lower after it was announced on Monday that there was a legal dispute over the granting of mining rights over land which included its biggest Australian mine.
BHP Billiton [JSE:BIL] traded 0.13% or 44c lower at R329.50, after the share was under pressure on the Australian stock exchange. The world’s biggest mining company that counts China as its biggest market, fell 2% on the Australian bourse.
