Riding a global rally
July 17, 2009
By Palesa Motloung
Johannesburg - Stocks edged into the black in early trade on Friday following the direction of firmer global markets, a local trader said.
By 9.16am the JSE all share index was up 0.28 percent, with resources collecting 0.52 percent. Gold miners added 1.50 percent and platinum counters were up 0.51 percent. Banks were flat, up 0.16 percent, financials edged up 0.24 percent and industrials were flat, up 0.12 percent.
The rand was bid at R8.13 to the dollar from R8.08 when the JSE closed on Thursday. Gold was quoted at $936.67 an ounce from $935.80 at the JSE's last close, and platinum was at $1 167.50 an ounce, from $1 160.50 at its previous close.
"We are slightly firmer this morning. The overnight performance on the Dow was up, Asia was up this morning too. General emerging markets are all stronger and we are following global markets," the trader said.
"It's a bit of a slow start to get direction. The rand is slightly weak and resources are firmer on the rand.
"We will continue to keep an eye on the US and their earnings and any surprises out of there will be watched," she said.
Dow Jones Newswires reported that US stocks staged a late afternoon rally on Thursday, with American Express helping the DJIA, Nokia tumbling on concerns about competitive pressure and Marriott International losing ground after a decline in quarterly earnings.
The DJIA gained 95.61, or 1.11 percent, to 8711.82. The Nasdaq Composite gained 22.13, or 1.19 percent, to 1885.03. The S&P 500 rose 8.06, or 0.86 percent, to 940.74.
Financial stocks drew attention as earnings reports trickled in.
JPMorgan Chase fell 13 cents, or 0.4 percent, to 36.13. The financial firm posted record net revenue, driven by stellar investment banking results, but rising loan losses continue to eat into profits. Bank of America fell 25 cents, or 1.9 percent, to 13.17 and Citigroup lost 14 cents, or 4.4 percent, to 3.03. Both report earnings on Friday.
American Express climbed 1.06, or 3.9 percent, to 28.28. Lower expenses and less loss provisioning will buttress American Express's second-quarter earnings despite revenue contraction, JPMorgan said, upgrading the stock to neutral from underweight.
Investors are "positioning themselves to raise equity exposure as earnings season unfolds," said Fred Dickson, market strategist at DA Davidson. "Earnings season is unfolding better than expected."
Asian shares are higher on Friday as Wall Street continued to lift sentiment. But gains were tentative ahead of the weekend, while Japan's NEC fell after reports of a possible capital raising.
In Japan, the Nikkei added 0.6 percent and Hong Kong's Hang Seng was last up 1.4 percent.
European stock markets are seen opening a bit higher with more earnings on tap while investors hope that results and outlooks continue to beat expectations.
Among equity movers on the JSE, Anglo American was up R1.14 to R235.05 and BHP Billiton collected 97c to R191.52. Petrochemicals group Sasol weakened 95c to R284.06.
Gold miner AngloGold Ashanti rose R2.58 to R297.59, Gold Fields gained R2.19, or 2.34 percent, to R95.69 and Harmony firmed R1.24, or 1.68 percent, to R74.84. Platinum miner Anglo Platinum picked up R1.40 to R521.40 and Impala Platinum collected 99c to R176.49, but Lonmin declined 98c to R147.87.
Diversified miner Exxaro added R1.10, or 1.43 percent, to R77.94.
Among industrials on the JSE, brewer SABMiller eased 50c to R175.01 and Barloworld weakened 45c, or 1.14 percent, to R39.05.
Banking group Standard Bank was up 86c to R96.86 and Nedbank advanced R1.12, or 1.04 percent, to R108.32. Sugar group Illovo gained 50c, or 1.69 percent, to R30.
Retailer Woolies weakened 18c, or 1.23 percent, to R14.42, Truworths lost R1.03, or 2.54 percent, to R39.47, Massmart lost 90c, or 1.11 percent, to R80 and JD Group was off R1.26, or 2.93 percent, to R41.72.
However, Pick n Pay was up 45c, or 1.25 percent, to R36.45 and Lewis put on 90c, or 1.68 percent, to R54.40. Liberty International gave up 62c, or 1.13 percent, to R54.13. Construction group Basil Read collected 31c, or 2.30 percent, to R13.80.
Among telecommunications groups, MTN Group collected 50c to R129.95 while Vodacom eased 19c to R58.21 and Telkom lost 54c, or 1.34 percent, to R39.86.
Moody's Investors Service's ratings review on Telkom is continuing notwithstanding Moody's Sovereign Risk Group's decision today to downgrade South Africa's local currency sovereign rating to A3 from A2 with a stable outlook in conjunction with a series of related actions as part of the conclusion of the sovereign ratings review, the ratings agency said on Thursday.
With respect to Telkom, the Global Scale senior unsecured issuer rating of A3 and the NSR LT issuer rating of Aa3.za remain on review for possible downgrade as the assessment of the interplay between Telkom's new capital structure and its revised business strategy (specifically with respect to fixed and mobile expansion) following the recent disposal of 15 percent and unbundling of the remaining 35 percent of its stake in mobile operator, Vodacom Group, remains under way, Moody's said.
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