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Johannesburg – The JSE was slightly higher on Monday morning amid lacklustre trade the day before Christmas‚ with gold miners providing the most upside and banks the main laggards after a strong performance last week.
At 9:49am‚ the All Share [JSE:J203] index had added 0.14% to 39‚180.75. Gold miners lifted 1.40%‚ while banks gave back 0.14%.
“The Dow Jones (industrial average) has lost 2.5% of its value recently‚ while the JSE has just gone up and up‚” Cassie Treurnicht‚ research analyst at Gryphon Asset Management in Cape Town‚ said.
“One would have expected the JSE also to shed value in line with the Dow‚ but it did not‚ with no correlation seen between the two markets.
“US investors have probably invested money in the JSE because money has to be on the table somewhere and emerging market yields‚ such as our own‚ are looking better than developed market yields. But a correction is on the table for the JSE in the near future‚” Treurnicht said.
“Gold stocks have been very weak as of late due to a stronger rand‚ and the rand gold price also declining‚ which has contributed to gold miners’ weakness‚” he said.
“Stocks such as Anglo American and BHP Billiton have experienced strong gains‚ due to news that China’s economy has started to turn around‚ which has had a positive influence on diversified miners in general.
“The vote on the US fiscal cliff issue has been cancelled and we are not going to see a resolution soon‚ and that has pushed the US markets down from Wednesday to Friday last week‚ with money being taken off the table‚” he said.
“US futures are also trading 0.5% lower this morning. However‚ the general belief is that there will be an ultimate resolution in January or February.”
Local markets are open half-day on Monday‚ and are then closed on Tuesday and Wednesday for the Christmas and Day of Goodwill holidays. They will reopen on Thursday‚ December 27.
Hong Kong’s Hang Seng index closed a tad higher‚ up 0.16% at 22‚541 points‚ while Japanese markets were closed for a holiday.
