Johannesburg - The JSE all share index made good gains on Monday‚ with resources and industrial counters helping the index advance‚ kicking off the fourth quarter on a good note.
The JSE all-share index [JSE:203] closed up 1.43% at 36 269.27 points‚ with the resources index [JSE:210] souring 2.77% and industrials [JSE:211] 1.06% firmer.
The gold price reached its highest level since November last year on Monday‚ after the president of the Federal Reserve Bank of Chicago said the central bank's bond-buying programme would likely continue through next year.
At 17:00 gold was quoted at $1 778.23 per fine ounce‚ a gain of 0.53% on the day.
“Early morning resilience has turned into a late afternoon rally led by a run in resource counters.
"Manufacturing PMI data out of China was a slight miss on consensus‚ but more importantly showed further contraction in the world’s fastest growing major economy.
"The news adds to the speculative hopes of further monetary easing out of the region‚ turning bad news into possible good news for the short term‚” said Shaun Murison‚ market analyst at IG SA.
“The noticeable move in our market followed the surprisingly upbeat manufacturing data out of the US‚ which showed industry expansion rather than the consensus forecast of marginal contraction‚” he added.
European bourses also had a good rally with the UK FTSE 100 last seen 1.50% higher and the Paris CAC 40 index 2.12% stronger.
Barclays Bank said in its global note on Monday that after a week of poor investor sentiment last week‚ financial markets had started the fourth quarter on an optimistic tone‚ with the risk asset rally seemingly to have been partly driven by relief over the Spanish bank stress test results‚ which were broadly in line with consensus expectations.
“The independent bank-by-bank stress test results estimated a capital deficit of €59bn under a negative economic scenario for this year and next year. With the Spanish budget and bank stress test out of the way‚ investor attention is likely to be drawn back to the state of global growth‚” the bank said.
European manufacturing PMI data out on Monday were broadly in line with expectations at 46.1‚ up from 45.1 in August. Spain and Italy PMI surveys were marginally higher than consensus and showed signs of stabilising albeit at very weak levels‚ it said.
The Chinese manufacturing PMI rose to 49.8 in September from 49.2 in August‚ below the 50.1 consensus forecast.
Local stocks that showed movement were Anglo American (AGL) up 4.65% to R256.04 and BHP Billiton (BIL) up 3.39% to R266.58.
Among gold counters AngloGold Ashanti (ANG) closed 0.78% higher at R294.71 after the world’s third-largest gold producer said some of its mines would be closed and job losses might occur if unprotected strikes at its mines continued.
The gold miner said in an update on Monday that its mines in SA remained at a standstill due to the unprotected strikes‚ which began on September 20 at the Kopanang operation and spread to the five remaining operations on September 25.
Meanwhile Gold Fields’s (GFI) Beatrix and KDC West operations have also been affected by strikes. Gold Fields closed 1.41% higher at R108.25.
Exxaro (EXX) added 3.14% to R165.99 and Coal of Africa (CZA) jumped more than 14% to R2.42.
Meanwhile, South African near-dated futures started the week with a strong rally‚ in line with optimism in major international markets following Spain’s stress test on its banks on Friday and the release on Monday of better-than-expected US manufacturing data.
The near-dated Alsi gained 1.81% to end at 32 360 points.
The total number of contracts that exchanged hands was 32 340 from 42 077 on Friday.
The rand was at R8.34/$ from R8.28 previously‚ and the spot price of gold was at $1 777.26 per fine ounce from $1 773.46/oz.
Dow Jones Newswires reported that traders looked with optimism at Friday's results from stress tests on Spain banks‚ and on US manufacturing data‚ which beat expectations.
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