Johannesburg - South African stocks ended 250
points higher on Monday, moving in line with firm world markets amid high
earnings expectations which helped the market continue last week's positive
trend, a trader said.
At 17:00 the JSE all share index had put on 0.99%, with resources
collecting 0.44%. Gold miners edged up 0.24% and platinums gained 2.13%.
Banks firmed 1.35%, financials rose 1.62% and industrials were up 1.24%.
The rand was bid at 7.30 to the dollar from 7.36 just before the JSE
closed on Friday. Gold was quoted at $1 056.78 a troy ounce from
$1 050.30/oz at the JSE's last close, and platinum was at $1 341/oz,
from $1 332/oz at its previous close.
At 16:53, Brent crude was at $71.35 from a close of $70.
"We closed up on the back of world markets, Europe also picked up," a
trader said.
"There are expectations of good company results. There are companies
still to come out with results, the expectations are very high and that is
supporting the market. If they release disappointing results we may see some
profit taking, a case of buy on rumour, sell on fact," he said.
"The rand has also strengthened and that doesn't bode well for these
resources. But of course a strong rand means a weak dollar, and that
supports the commodity prices," he added.
Dow Jones Newswires reports that a jump in crude oil prices lifted
energy stocks, which in turn led a broad-based US stock market rally on
Monday morning as investors also looked ahead to this week's earnings
reports due from major banks.
The DJIA was recently up 45 points, or 0.5%, at 9 909.83, off to a
promising start to setting a new high for 2009. The Nasdaq Composite Index
gained 0.6%. All the S&P 500's sectors traded higher, spurring the broad
index to a 0.3%. The strongest categories were energy, up 1.8%; basic
materials, up 1.4%; and industrials, up 0.9%.
Commodity prices drew strength from rising confidence about an economic
recovery and a pullback in the dollar as investors grew more aggressive,
putting cash they'd previously hoarded to work via market bets. A weak
dollar also tends to boost the prices of raw materials because they're
traded globally in terms of the US currency.
In recent action, oil futures were up $1.81 to $73.58 a barrel in New
York. The broad Dow Jones-UBS Commodity Index was up 2.1%, while the US
Dollar Index was off 0.5%, hurt by declines in the dollar's value against
the yen and euro. However, it posted a slight gain versus the pound.
Stephen Pope, chief global market strategist at Cantor Fitzgerald
Europe, said a weaker dollar is "allowing non-dollar based investors to
acquire US assets and 'cheap valuations' when reflected back into their base
currency. The S&P 500 is on a price/earnings basis trading at a discount to
the MSCI World Index of 23 developing countries."
Though Monday's economic and earnings calendar is light, investors are
gearing up for a series of reports in coming days that will offer further
details about Wall Street's continued recovery from the credit crisis. Of
the banks due to report this week, JP Morgan Chase was recently up 0.4%,
Bank of America was up 0.9%, Citigroup was up 1%, and Goldman Sachs was up
0.4%.
The Djia was last flat, up 0.65%.
- I-Net Bridge