Massive boost for commodity shares on JSE

Johannesburg - International commodity prices regained their upward momentum on Wednesday, after some profit taking last week, and that gave commodity shares on the JSE a massive boost, which also pulled the rest of the market higher.

All the major indices were more than 2% higher.

The resources index, which lost more than 5% last week, was in early trade on Wednesday more than 3% higher, while the gold index traded more than 5% higher.
 
Commodity prices were supported by upbeat data on the US economy, while the oil price was also firmer.

By midmorning the All-share index on the JSE was back above 50 000 points and traded 2.07% higher on 50 424 points. The Top 40 index was a solid 2.18% stronger on 43 794 points.

At that stage the resources index was 2.88% higher, while the gold index regained 5.34% as investors are looking for buying opportunities after the gold index lost more than 40% of its value over the previous ninety days. The gold price was only 0.37% higher at $1 141.50 per ounce.

The industrial index was also 2.07% higher supported by higher share prices in London and the financial index gained 2.01%.

International share prices were also higher, with a strong rally on Wall Street on Tuesday after strong US economic data pulling the Asian markets higher on Wednesday too.

Share prices were lifted by data showing US consumer confidence hitting its highest level in more than 15 years in December, in addition to robust housing numbers.

Commodity prices followed and copper on the London Metal Exchange was up 1.6%t at $5 565 per tonne as trading resumed after the Christmas holidays. Shanghai zinc and nickel prices were also pulled higher.

Iron ore on the Dalian Commodity Exchange extended gains after breaking a 9-day slump the previous day. It was up 3.5% at 569.0 yuan ($81.82) per tonne. The raw material has risen about 170% this year, boosted by expectations of Chinese stimulus. It has also benefited from hopes that the incoming Trump Administration will increase infrastructure spending.

Iron ore producer Kumba [JSE:KIO] gained 2.8% to R162.01, while Assore [JSE:ASR] traded1.31% higher at R212.80. Exxaro [JSE:EXX] gained 3.91% to R88.78. Exxaro’s  share price was before Wednesday’s trade still 22.78% softer over the previous ninety days on the news that Anglo American [JSE:AGL] and the company’s empowerment shareholders want to sell its shares in the group.

BHP Billiton [JSE:BIL], which lost more than 7% in last week’s profit taking, regained 3.47% of its value on Wednesday morning to trade at R224.01. Anglo American was 2.46% stronger on R199.56 after losing 6.99% last week. Glencore [JSE:GLN] was 2.08% higher on R47.60.

Gold shares were the spectacular performers with Harmony [JSE:HAR] trading 8.45% higher at R29.12 and Sibanye [JSE:SGL] 7.39% stronger at R23.71. Gold Fields [JSE:GFI] was 6.45% higher at R42.11 and Anglogold [JSE:ANG] traded 4.97% stronger R142.66. Anglo American Platinum [JSE:AMS] jumped 5.45% to R267.00.

Naspers [JSE:NPN] gained 2.49% to R1 984.98 and Sasol [JSE:SOL} was 1.96% stronger at R403.98.