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Johannesburg - Gold shares were the big winners on the JSE on Thursday as the dollar took a hammering on international markets.
A softer dollar is good news for commodities, particularly gold, as investors have to pay less for them in their own currencies if the dollar is weak. The gold price gained more than $13 or 1.05% to $1 258.40 in early morning trade and by mid-morning the JSE's Gold index was already 6.03% stronger, with the top gold shares among the star performers.
The index has been under pressure over the past month, losing 5.82% over the past seven days and 6.09% over the past 30 days.
By mid-morning the Resources index was 2.63% up after being more than 3% stronger in earlier trade, which helped pull the major indices marginally higher. By mid-morning the All-share index had gained 0.50% at 53 329 points and the Top 40 index was 0.36% stronger at 46 862 points.
Nothing much happened in the rest of the market, with many investors away for a long weekend. The Financial index was 0.43% lower and the Industrial index only 0.09% stronger.
The dollar was hit from two sides on Thursday morning. Janet Yellen, chairperson of the Federal Reserve, indicated on Wednesday that US authorities will not raise US interest rates soon and that when it happens, it be very gradual, which is negative for the dollar.
The big shock was however news that the Bank of Japan defied market expectations for more monetary stimulus. The yen strengthened against the dollar to recover the losses of recent weeks as the Japanese currency weakened on expectation of further monetary stimulus.
The near 3% fall in the dollar/yen exchange rate was its biggest daily drop since August 2015 and the second-biggest in five years, while the yen's gain against the euro was the biggest in five years.
READ: BoJ shock sends yen surging, Nikkei dives
Analysts said the Bank of Japan’s decision came as a complete surprise as they expected further measures to accelerate the weakening of the yen to support Japan's struggling competiveness. Data showed consumer prices in March fell at the fastest pace in three years, while household spending declined at the most rapid level in a year.
Asian stocks surrendered early gains in chaotic trade on Thursday, with Japan’s Nikkei index tumbling 3.6%. Major European markets were also more than 1% softer at mid-morning.
The strong gold share surge of more than 90% in three months came to a standstill in the last few weeks, due to the strong recovery of the rand to levels below R14.50. But on Thursday morning most of the major gold shares were trading more than 6% higher, recovering some of the losses of the recent past. The rand remained steady at R14.40 to the dollar.
Before Thursday's trade Sibanye [JSE:SGL] was 11.18% lower over the past 30 days, but the stock gained 6.49% on Thursday morning to R52.92. It is however still 126.65% up over the past 90 days.
Harmony [JSE:HAR], the top performing gold share over the past 90 days with gains of 265.5%, also lost 11.78% over the past 30 days but traded 6.65% higher at R47.90 on Thursday.
AngloGold Ashanti [JSE:ANG], which has been the steadiest over the past month with a loss of only 1.47%, was 6.29% higher at R220.39. Gold Fields [JSE:GFI] traded 4.75% stronger at R60.64.
The platinum price was also $9 or 0.80% higher at $1 035, helping Royal Bafokeng Platinum [JSE:RBP] to gain a massive 7.07% to R43.74. Impala Platinum [JSE:IMP] was also 4.23% higher at R56.90, but Anglo American Platinum [JSE:AMS] traded only 1c up at R389.11.
Anglo American [JSE:AGL], which treaded water over the past seven days with a loss of 1.34%, jumped 7.15% to trade above R150 again at R150.34. Before Thursday’s trade the share was 123.2% higher than the 52-week low of R53.30 reached early in January. BHP Billiton [JSE:BIL] was 1.30% stronger at R197.57 and Sasol [JSE:SOL] gained 2.77% to R472.32.
Retail shares remained strong, with Pick n Pay setting a new 52-week high after announcing a 26% earnings rise on Tuesday. Pick n Pay Stores [JSE:PWK] was 4.09% up at R73.80 and Pick n Pay Holdings [JSE:PIK] gained 2.24% to set a new high of R30.60. Before Thursday’s trade, both shares were over 12% higher than a month ago.
Spar [JSE:SPP] was also at a new high of R213.51 after gaining 0.97% in morning trade. The stock has now gained 13.07% over the past month.
