Johannesburg - Stocks were firmer
on Wednesday morning guided by strong Asian markets which pushed up in the
wake of a positive close on Wall Street on Tuesday.
However, the strong local currency was limiting gains on the bourse.
At 09:15 the JSE all share index had added 1.29%, with resources gaining
2.19%, gold counters 3.79% higher and platinum miners firming 2.30%.
Banks collected 0.92%, with financials and industrials adding 0.78% and
0.62% respectively.
The rand was bid at 7.36 to the dollar from 7.40 when the JSE closed on
Tuesday. Gold was quoted at $1 017.43 a troy ounce from $995.50/oz at
the JSE's last close, and platinum was at $1 339/oz, from $1 323/oz at
its previous close.
"We are up strongly this morning. This after retail sales in the US
rebounded nicely and the PPI was also stronger than expected," the trader
said.
"That spilled over into the East and then on to us.
Commodity prices are
also higher, that supported the East and is spilling over into our market.
"The rand is still very strong, had it not been for the strong rand the
bourse would be up maybe around 500 points," he said.
Dow Jones Newswires reported that the continued steady stream of buying
in Caterpillar, General Electric, DuPont and a host of other industrial and
materials companies paced all three major indices to new closing highs for
the year on Tuesday.
Going into September, many investors had preached caution on stocks,
noting the month is historically one of the market's weakest.
Moreover,
given the previous few months had provided significant market gains, there
was serious trepidation about a possible round of profit taking among the
investing public.
"Even though the market has been going up the past two weeks, sentiment
hasn't gotten anymore bullish. Until optimism becomes excessive, the market
will continue to rally," said Bruce Bittles, chief investment strategist for
Robert W Baird. "For now, betting against the market would be fighting the
tape and the Fed, and that isn't a good combination."
'Recession is over'
Tuesday's market was helped by Federal Reserve Chairman Ben Bernanke,
who said that from a technical point, the "recession is very likely over at
this point". Bernanke made his comments during a question-and-answer session
at the Brookings Institution.
Overall, the DJIA closed up 56.61 points, or 0.59%, to 9683.41, marking
its seventh gain in eight sessions and its highest close since October 6.
The S&P 500 tacked on 3.29, or 0.31%, to 1052.63, also making its
highest close since October 6. The Nasdaq Composite rose 10.86, or 0.52%, to
2102.64, hitting its highest close since September 26.
Asian stock markets are higher on Wednesday after Wall Street closed at
its best levels for 2009.
Japan's Nikkei ended up 0.5% and Hong Kong's Hang Seng was last up 1.5%.
European bourses are tipped to open higher boosted by fresh optimism
about the US economy following comments from Federal Reserve Chairman Ben
Bernanke and positive data.