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Johannesburg - The softer dollar gave world markets a breather on Monday morning, with resource shares even enjoying a good run on the JSE.
Gold shares were particularly in demand as the softer dollar encouraged investors to buy gold and other commodities, with the gold price gaining more than $5.00 or 0.52% to $1 071.81 and the platinum price trading more than $7.5 or 0.82% higher at $886.81.
The oil price however did not benefit from the softer dollar and Brent crude traded at only $36.00 per barrel, the lowest since 2004.
READ: Brent oil slides to 11-year low
The rand also traded firmer and at midday on Monday was at R15.01 to the dollar. However, that did not deter investors in commodity shares as the expectation is that the rand will soon deteriorate again as South Africa's economic prospects continue to be bleak.
It must be said the volumes were substantially down on Monday, which overstated the share price moves. The gains of Monday morning were however not enough to make up for the losses of last week.
By midday the All-share index was again above 49 000 points and traded 0.94% higher at 49 177 points. The Top 40 index was also 0.94% stronger at 44 391 points.
The Gold index was at midday already 6.55% higher than Friday’s close, and the Resources index was at that stage 3.54% stronger. The Industrial index benefited from stronger European markets and gained 0.46%, while the Financial index was 0.83% higher on the back of a stronger rand.
The best performer in the resources sector was ArcelorMittal [JSE:ACL] which traded a massive 15.52% higher at R3.35. A rebound was however to be expected as the share lost 48.21% of its value over the previous seven days.
The big commodity shares were all higher on the London Stock Exchange and that spilled over to the JSE. Anglo American [JSE:AGL], which lost 12% over the previous seven days and 48% over the previous 30 days, was at midday 7.2% stronger at R66.12. BHP Billiton [JSE:BIL] gained 2.62% to R163.98.
Investors ignored the news that Glencore’s [JSE:GLN] credit rating was cut one level to Baa3 by Moody’s Investor Service, the lowest investment grade. The share price at midday was 5.88% higher at R19.26.
Moody’s said the downgrade reflects their "expectations that the pricing environment in mining will remain unfavourable in 2016-17, making a return to the previous level of earnings unlikely". Elena Nadtotchi, Moody’s lead analyst of Glencore, said however the agency believes Glencore has the capacity to adjust its balance sheet to a reduced earnings level in order to maintain its investment grade ratings.
Among the top gold shares Sibanye [JSE:SIB] was 12.1% higher at R25.38 and Harmony [JSE:HAR] traded 8.08% stronger at R14.98. Gold Fields [JSE:GFI] gained 5.78% to R42.31.
By midday Naspers [JSE:NPN] was unchanged at R2 067.00. The share was one of a few that gained last week and is 3.61% higher over the past seven days. Richemont [JSE:CFR] gained 0.55% to R107.64 and MTN [JSE:MTN] was 0.66% stronger at R135.35. The low oil price did not affect Sasol [JSE:SOL] as the share price was 2.66% higher at R387.50.
Growthpoint [JSE:GRT], the biggest property share on the JSE, gained 2.33% to R22.82. Property shares were in the firing line when bond rates were sharply higher in reaction to Jacob Zuma’s decision to change his minister of finance.
In the financial sector Standard Bank [JSE:SBK] was only 0.28% higher at R112.99, but FirstRand [JSE:FSR] gained 3.43% to R43.71.
