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Johannesburg - With the value of the rand drifting lower as financial markets wait for a policy statement from the US Federal Reserve, JSE indices continued to creep higher on Wednesday to reach more 52-week highs.
All the major indices on the JSE were higher by mid-morning, with the All-share index, the Top 40 index and the Industrial index all trading at new 52-week highs. Financial and resources shares also gained ground. The rand was at R13.07 to the dollar, after trading as low as R12.95/$ earlier in the week.
The markets are waiting to see if
the Fed’s policy statement gives any indication of further tightening in US
policy, which could be beneficial for the beleaguered dollar.
Expectations of higher US interest rates subdue investors’ appetite for emerging markets assets, such as bonds, which offer higher returns but carry more risk.
A weaker rand is however good news for the JSE, as the big dual-listed shares on the local market earn most of their income abroad in other currencies, which get more in rand if the local currency is weak.
Most of the dual-listed shares are included in the Industrial index, which traded 0.33% higher at a new 52-week high of 82 470 points. It helped raise the All-share index by 0.37% to a new 52-week high of 54 700 points, while the Top 40 index was 0.44% up on a high of 48 437 points. The Financial index was 0.33 stronger.
Naspers [JSE:NPN], the biggest share on the JSE whose strong gains this year helped push major indices higher, struggled in early trade but by mid-morning was 0.12% higher on yet another all-time high of R2 865.50. The share, which represents more than 12% of the JSE’s market value, gained more than 42% in the year to date.
Richemont [JSE:CFR] was 0.19% higher at R108.71, but Sasol [JSE:SOL] lost 0.52% to R385.56 after making gains earlier in the week.
The resources sector, which benefits directly from a weaker rand as its commodities are priced in dollar, at mid-morning was 0.58% higher. Glencore [JSE:GLN] was 0.96% up at R56.82 - a new 52-week high. The share gained 3.74% over the past week and more than 18% over the past 30 days.
The sector was also supported by a global broad-based rally in commodities, from oil to copper.
Anglo American [JSE:AGL] was above R200 for the first time since April 10, when it gained 1.2% to R202.00. Anglo gained more than 7% on Tuesday after its subsidiary Kumba [JSE:KIO] added more than 17% on the back of strong results. Kumba fell victim to profit-taking on Wednesday and lost 3.10% to R196.71.
BHP [JSE:BIL] traded 0.77% stronger at R230.25. Before Wednesday’s trade the stock gained 17% over the previous 30 days.
