JSE higher despite weak Asian stocks

2011-09-06 10:23

Johannesburg - Despite weaker Asian markets on persistent concerns about eurozone debt and US growth, the JSE - and some European markets - managed to eke out small gains in early trade on Tuesday.

By 09:23 local time, the JSE All-share [JSE:J203] index was up 0.45%, with resources adding 0.70%, platinum miners gaining 1.25% and gold miners up 0.50%. Banks added 0.71%, financials garnered 0.44% and industrials collected 0.24%.

The rand was bid at R7.11 to the dollar, from R7.12 at the JSE's close on Monday. Gold was trading at $1 906.85 a troy ounce from $1 896.10/oz at the JSE's previous close, while platinum was at $1 883/oz, from $1 877/oz previously.

A local trader said that the JSE had already started reacting negatively to the poor US jobs data last Friday afternoon. As the Asian markets were shut at that time, they had fallen sharply on Monday, in a catch up reaction to the data.

"Yesterday the JSE was down (2%), but not as much as some other markets. Our top 40 shares are starting to run up - they are coming into good value levels. The gold shares are steady as well and that is helping the top 40.

"The global markets have been hit hard - but we might even find the overseas markets will drift up today. Even though the Dow futures are still in negative territory, they are recovering from their lows," he said.

He added that although he expected the volatility in the markets to continue for some time, he was not surprised to see a rally.

He pointed out that the Dow futures were down as much as 270 points at one stage earlier today, and they are currently just 166 points lower. "So they have come back quite nicely," he said.

The Nikkei closed down 2.21%, Australian shares closed down 1.6%, but in Hong Kong, the Hang Seng was off just 8 points. In London the FTSE was last 21 points higher.