Resources lead the charge
May 20, 2009
By Gareth Vorster
Johannesburg - The JSE was firmer in early trade on Wednesday led by resources, with Sasol and Anglo American shares breaking barriers of R300 and R210 respectively.
By 9.20am, the JSE all share index had added 0.64 percent, with resources up 0.81 percent and platinum counters adding 1.86 percent. Gold miners added 1.41 percent. Banks however, were flat (down 0.07 percent)while financials firmed 0.15 percent and industrials put on 0.76 percent.
The rand was last bid at R8.45 to the dollar from R8.46 when the JSE closed on Tuesday. Gold was quoted at $927.65 per ounce from $926.42 at the JSE's last close, and platinum was at $1 144.50 per ounce from $1 130.50 at its previous close.
A local trader said: "The JSE has opened higher this morning led by resources. Sasol has broken the 300 rand barrier amid a stronger oil price, and Anglo is past the R210 mark. Platinum stocks are also higher.
"There doesn't seem to be any current bad news about at the moment, so the JSE is taking the lead from that," the trader said.
Dow Jones Newswires reported that European stocks are expected to open lower on Wednesday, hit by a weak close on Wall Street on Tuesday, as investors take a cautious stance after recent healthy gains.
"The expectations are that Europe will give up some gains at the open," said Matt Buckland, a dealer at CMC Markets, "although, as we've been seeing in recent trade, there's no shortage of optimism amongst investors and it's difficult to envisage this as the start of a bigger reversion."
Buckland sees European indexes opening lower, with London's FTSE 100 index set to fall 21 points to 4 461. He also sees Frankfurt's DAX index dropping 25 points to 4 934, and the CAC-40 index in Paris down 10 points at 3 265.
On Wall Street on Tuesday, US stocks gave back some of Monday's gains as Home Depot and housing data tempered hopes of an imminent turnaround in the housing market.
The Dow Jones Industrial Average fell 29.3 points, or 0.3 percent, to 8 474.85, while the broad Standard & Poor's 500 index fell 1.58, or 0.2 percent, to 908.13.
Still, despite these losses, the Dow Jones Industrial Average is up more than 29 percent since its 12-year closing low of 6 547.05 on March 9. Indexes in Asia were mixed on Wednesday, but with sentiment in Japan helped by gross domestic product data that weren't quite as poor as expected.
Japanese first quarter GDP dropped a price-adjusted 4.0 percent quarter on quarter, or an annualised 15.2 percent. It was the fourth straight quarter of shrinkage, but not as bad as tipped: economists polled by Dow Jones Newswires had expected GDP to contract a record 4.4 percent quarter on quarter, or an annualised 16.5 percent.
“Clearly this is the bottom (for the Japanese economy). The second quarter and particularly the third quarter are going to show reasonably sharp improvement, based on the swing in the inventory cycle that should send net exports positive," said Macquarie Research economist Richard Jerram.
Japan's Nikkei 225 index closed 0.6 percent higher but Hong Kong's Hang Seng index was 0.4 percent lower. In the currency markets, the dollar fell against the yen in Asia on Wednesday as the slower-than-expected contraction in Japan's gross domestic product prompted investors to sell dollars to lock in profits.
The Japanese currency touched an intraday high of ¥95.48, compared with ¥95.97 in New York late on Tuesday. At 06.20 GMT, the dollar stood at ¥95.66, while the euro traded at $1.3595, and sterling at $1.5468.
Oil prices have already risen by about 30 percent over the last month, largely on the expectation that summer gasoline demand will be strong despite the ailing global economy.
At 06.25 GMT, Nymex light, sweet crude for July delivery stood 39 cents higher at $60.49 per barrel, while spot gold was little changed at $928.50 per troy ounce.
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