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Johannesburg/London - South African stocks jumped nearly 3% in the first trading day of 2012, booking their highest close since early December, as better-than-expected Chinese manufacturing data helped drive mining companies higher.
The Top 40 (Tradeable) [JSE:200] index of blue chips closed up 2.79% at 29 263.24. The broader All Share [JSE:J203] index was up 2.45% 32 768.35.
“There was some good manufacturing data that came out of China. That has helped move the market higher today. The expectation is that the trouble in Europe is not affecting China,” said Jonathan Feigin, a trader at Consilium Capital.
However, he added that the gains, notched up in thin end-of-holiday trade, might easily be reversed. “I wouldn’t believe this move. Any move of this nature is bound to have a pull-back.”
The rand was bid at R8.03/$ from R8.10/$ at the JSE's close on Friday. Gold traded at $1 597.62 a troy ounce from $1 562.47 at the JSE's previous close, while platinum was quoted at $1 413/oz, from $1 377.70/oz at the previous close.
More risk appetite
Investors scooped up the euro and global stocks as better-than-expected economic data in the United States, Europe and China whetted risk appetite, while tensions in the Middle East between Iran and the United States boosted oil prices.
The pace of growth in the US manufacturing sector accelerated in December, its best month since June, as US construction spending surged to a near 1-1/2 year high in November.
“That we continue to make progress toward a full recovery is more important than any specific data,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “People are very optimistic that 2012 will prove to be a big year for the recovery and the stock market.”
Global stocks, as measured by the MSCI world equity index , were up 1.97% after ending 2011 down 9.2%.
Key US indexes also advanced shortly after opening, accelerating gains after the U.S. data. The Dow Jones industrial average climbed 2.01% as the Nasdaq Composite Index added 2.29% and the Standard & Poor’s 500 Index gained 2.09%.
The euro jumped 1% against the U.S. dollar to $1.3059. The single currency has struggled as the region’s ongoing sovereign debt crisis stokes worries that the monetary union could slip into recession.
The U.S. figures followed data released earlier in the day that showed German unemployment fell more than expected in December, with the jobless rate falling to the lowest level since the unification of Germany two decades ago.
Chinese premier Wen Jiabao also said the country will fine-tune monetary policy in 2012, suggesting the government will move to support growth in the world’s second-biggest economy.
Oil boosted by tensions
Data earlier showed that China’s big manufacturers narrowly avoided a contraction in December, but downward risks persist.
ICE Brent crude futures climbed 3.71 percent to $111.36 a barrel on the first day of trading for 2012. U.S. crude futures were up 3.79 percent to $102.58 a barrel.
Military exercises in the Gulf by Iran and the movement of U.S. naval vessels in the area has raised fears of a confrontation between Tehran and Washington that could cut off oil exports from the region.
Iran has said it could shut the Strait of Hormuz, through which 40 percent of world oil is shipped, if sanctions were to be imposed on its crude exports.
The Top 40 (Tradeable) [JSE:200] index of blue chips closed up 2.79% at 29 263.24. The broader All Share [JSE:J203] index was up 2.45% 32 768.35.
“There was some good manufacturing data that came out of China. That has helped move the market higher today. The expectation is that the trouble in Europe is not affecting China,” said Jonathan Feigin, a trader at Consilium Capital.
However, he added that the gains, notched up in thin end-of-holiday trade, might easily be reversed. “I wouldn’t believe this move. Any move of this nature is bound to have a pull-back.”
The rand was bid at R8.03/$ from R8.10/$ at the JSE's close on Friday. Gold traded at $1 597.62 a troy ounce from $1 562.47 at the JSE's previous close, while platinum was quoted at $1 413/oz, from $1 377.70/oz at the previous close.
Investors scooped up the euro and global stocks as better-than-expected economic data in the United States, Europe and China whetted risk appetite, while tensions in the Middle East between Iran and the United States boosted oil prices.
The pace of growth in the US manufacturing sector accelerated in December, its best month since June, as US construction spending surged to a near 1-1/2 year high in November.
“That we continue to make progress toward a full recovery is more important than any specific data,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “People are very optimistic that 2012 will prove to be a big year for the recovery and the stock market.”
Global stocks, as measured by the MSCI world equity index , were up 1.97% after ending 2011 down 9.2%.
Key US indexes also advanced shortly after opening, accelerating gains after the U.S. data. The Dow Jones industrial average climbed 2.01% as the Nasdaq Composite Index added 2.29% and the Standard & Poor’s 500 Index gained 2.09%.
The euro jumped 1% against the U.S. dollar to $1.3059. The single currency has struggled as the region’s ongoing sovereign debt crisis stokes worries that the monetary union could slip into recession.
The U.S. figures followed data released earlier in the day that showed German unemployment fell more than expected in December, with the jobless rate falling to the lowest level since the unification of Germany two decades ago.
Chinese premier Wen Jiabao also said the country will fine-tune monetary policy in 2012, suggesting the government will move to support growth in the world’s second-biggest economy.
Oil boosted by tensions
Data earlier showed that China’s big manufacturers narrowly avoided a contraction in December, but downward risks persist.
ICE Brent crude futures climbed 3.71 percent to $111.36 a barrel on the first day of trading for 2012. U.S. crude futures were up 3.79 percent to $102.58 a barrel.
Military exercises in the Gulf by Iran and the movement of U.S. naval vessels in the area has raised fears of a confrontation between Tehran and Washington that could cut off oil exports from the region.
Iran has said it could shut the Strait of Hormuz, through which 40 percent of world oil is shipped, if sanctions were to be imposed on its crude exports.
