Metals add shine to JSE

Johannesburg - The JSE moved marginally higher in early trade on Tuesday, supported by a rebound in resources and gold counters on the back of a slightly weaker local currency.

By 09:16, the JSE all share index had edged up 0.29%. Resources were up 1.42%, gold miners added 3.48% and platinum counters collected 0.89%. Banks were off 0.83%, financials gave up 0.63% and industrials eased 0.40%.

The rand was last bid at R9.12 to the dollar, from R9.06 when the JSE closed on Monday. Gold was quoted at $879.25/oz a troy ounce from $870.13/oz at the JSE's last close, and platinum was at $1 162/oz from its previous close of $1 140.50/oz.

"We are marginally higher this morning. Resources are rebounding from yesterday. They were hit hard. Gold stocks are also up," a trader said.

"The rand has weakened slightly and that is probably giving these resources some support.

"We will probably find that some nervousness will creep into the market ahead of the kick-off of the earnings season in the US tonight. We are likely to track sideways ahead of that," he said.

Dow Jones Newswires reports US stocks fell on Monday but almost broke even in a late surge as fears of more losses for Citigroup and other banks were offset by hope for the stocks such as Ford Motor.

Bear markets

On the eve of earnings season, some investors worry of sobering reports from industrial, technology and commodities stocks. Also, an analyst warned on Monday that the US government has not succeeded in stabilising the banking sector despite six months of effort and myriad programmes. If history is any guide, the stock market may not wait for stability in the financial sector or earnings.

"The most powerful bull markets in history have been launched from the depths of despair during a financial crisis," wrote Carmine Grigoli, a strategist at Mizuho Securities on Monday. "Our research shows that bear markets related to a financial crisis usually end at the point of maximum financial distress, when authorities put in place measures that eventually improve conditions."

The DJIA fell 41.74 points, to 7975.85, and is still 23% above its bear-market low in early March. The broad S&P 500 index fell 7.02, to 835.48. The technology-oriented Nasdaq Composite fell 15.16, to 1606.71.

"The market's had a 25% run almost uninterrupted," said Bruce Bittles, chief investment strategist at RW Baird. As long as the S&P 500 holds above 750, Bittles believes, the stock market will battle upward until the summer as investors realise the economy is not quite as weak as they feared.

Asian shares are trading mixed on Tuesday, following Wall Street's step back, but Japan's Nikkei had erased early losses by midday as car makers headed higher.

Japan's Nikkei ended down 0.3% and Hong Kong's Hang Seng was last down 1.1%.

European stock markets are set to open marginally higher as investors adopt a more cautious stance ahead of US earnings reports.

- I-Net Bridge