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Johannesburg - The remarkable turnaround on global markets as uncertainty about a Donald Trump presidency in the United States turned into hope continued on Thursday, and the major indices on the JSE were sharply higher shortly after the opening.
The reconciliatory note in Trump’s post election speech gave many people hope of a clear distinction between the candidate Trump and the President Trump.
There was already a sharp turnaround on the JSE on Wednesday after Trump’s speech and the market ended slightly in the black, after being almost 2% down in early trade.
The All-share index rose sharply after the opening and at mid-morning was already 1.34% higher at 51 660 points, while the Top 40 index gained 1.39% to 45 113 points. All the major indices traded higher, with the Financial index 1.49% up and the Industrial index 0.84% stronger.
Resources shares, which moved up sharply on Wednesday, were higher again but the gains were modest. The Resources index was 2.45% up after gaining more than 4% on Wednesday and the Gold index, which in early trade on Wednesday was more than 12% firmer, gained only 1.03% on Thursday morning.
Local shares were supported by the European markets, which also made a sharp turnaround on Wednesday and opened higher again on Thursday. The biggest shares on the JSE are also listed in Europe, and local shares tend to follow their European counterparts.
The pan-European STOXX 600 Index fell as much 2.4% in early trade on Wednesday on uncertainty over Trump's policy positions but recovered progressively to end 1.5% up, its highest closing level since October 31.
The Nikkei Index, which plunged more than 5% on Wednesday, posted its biggest gain in nine months on Thursday morning. The Dow Jones Index in New York was almost 2% higher on Wednesday night, after the futures markets dropped more than 4% earlier shortly after Trump’s election. The surprising optimism on the American market encouraged investors elsewhere in the world to change their positions.
Expectations of higher inflation and economic growth under Trump, whose key policy priorities include generous tax cuts and higher infrastructure and defence spending, spurred the sudden reversal in market sentiment.
Investors who dumped shares on Wednesday and hedged themselves against further losses were scrambling to reposition themselves.
Among the dual-listed shares on the JSE Naspers [JSE:NPN] gained 1.66% to R2 207.00 and Steinhoff [JSE:SHF] lifted 0.76% to R70.10. Sasol [JSE:SOL] was supported by a turnaround in the oil price and at mid-morning was 1.19% stronger at R376.00.
British American Tobacco [JSE:BTI] could however not buck the recent downward trend in the share price and was 1.99% lower at R744.00. The share lost more than 15% of its value over the previous 30 days. Richemont [JSE:CFR], another share in the Rupert stable, traded 1.09% lower at R91.00.
Aspen [JSE:APN] continued to be one of the busiest shares on the JSE and was 3.73% stronger at R313.73.
The prices of dual-listed resources were sharply higher. Anglo American [JSE:AGL] traded above R200.00 for the first time since May 17 2015, gaining 3.71% to R205.39. The share reached a 52-week low of only R53.30 early in January and before Thursday's trade was already 205.21% higher for the year to date.
Glencore [JSE:GLN], which gained more than 8% on Wednesday, was 5.43% higher at R47.01. The share is already more than 123% higher for the year to date. BHP Billiton [JSE:BIL] gained 2.71% to R228.73.
Among the banks Standard Bank [JSE:SBK] gained 1.85% to R151.25 and FirstRand [JSE:FSR] was 1.92% higher at R51.92.
