Johannesburg - The JSE lifted off by 400 points on Thursday after receiving a healthy tailwind from more appetising local and international economic data.
By 17:00 local time the JSE all share index had lifted 1.52%, with resources leading the charge via a gain of 2.19%. Gold counters rose 1.68%, but platinum stocks were all the rage as they gained 3.69%. Banks gained 1.36% and financials 1.06%, while industrials collected 1.13%.
The rand was bid at R7.30 to the dollar from R7.36 at the JSE's close on Wednesday. Gold was quoted at $1 239.22 a troy ounce from $1 238.45/oz at the JSE's previous close, while platinum was at $1 531.50/oz from $1 513.o0/oz before.
Kevin Algeo, portfolio manager at Imara SP Reid, said it has been a strong day for local stocks after they opened up by a marginal 100 points.
"It's been a broad rally across the sectors on the back of some better than expected jobless claims in the US. As a result, the rand has strengthened. Local data has also contributed. PPI came out better than expected and the market continues to speculate that a rate cut in September is increasingly likely."
The local market bounced from its Wednesday's oversold position, with platinum shares benefiting the most.
"PPI, CPI and GDP suggest that the market expects a rate cut in September," said Algeo.
South Africa's producer price index (PPI) registered growth of 7.7% year-on-year (y/y) in July compared with 9.4% y/y in June, Statistics South Africa (Stats SA) data on Thursday showed.
The PPI increased 1.3% on a monthly basis after June's monthly increase of 4.0%. The PPI was expected to have reached 8.7% y/y, a survey by I-Net Bridge found, with forecasts among the leading economists surveyed ranging from 6.9% y/y to 9.3% y/y.
Dow Jones Newswires reports that US stocks bounced around in jumpy trading, but clung to modest gains on Thursday as a drop in jobless claims took some of the edge off concerns over a slowing US economic recovery.
The Dow Jones Industrial Average was recently up 9.7 points, as a bigger-than-expected decline in initial unemployment claims dented investors' anxiety over the recent stream of weak economic data.
Jobless claims declined by 31 000 to 473 000 in the week ended August 21, more than the 10 000 drop predicted by economists. However, new claims for the previous week were revised upward and the four-week moving average rose to its highest level since November 2009.
Many investors are still feeling uneasy over this week's reports showing a plunge in new and existing home sales and weaker-than-expected demand for durable goods.
"We're in a bit of a news lull right now, some of these macro (concerns) will linger on, even if these initial claims have some element of good news," said Jeff Morris, head of US equities at Standard Life Investments.
Thursday's modest climb may be in large part due to the market's recent battering bringing stock prices to attractive levels, he said.