JSE firmer, gold stocks lead charge
Feb 21 2011 13:52
I-Net Bridge
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Johannesburg - The JSE maintained a firmer tone in midday trade on Monday, led by gold stocks and resources despite a firmer rand.
Market watchers said investors were considering precious metals as a hedge amid political uncertainty in the Middle-East and North Africa.
Nick Kunze, head of dealing at BJM Private Client Services, said it would seem that some market players had taken advantage of last week's selloff in resources to get into the market.
By 12:00 local time, the JSE all-share index was 0.51% firmer, with gold counters up 2.27% and resources 0.769% higher. Platinum miners were -0.18% in negative territory, while banks rose 0.47%. Financials added 0.42% and industrials were slightly firmer (0.21%).
The rand was bid at 7.12 to the dollar from 7.14 at the JSE's close on Friday. Gold was quoted at US$1 397.51 a troy ounce from US$1 384.68/oz at the JSE's previous close, while platinum was at $1 845.59/oz from $1 835.50/oz before.
"Gold stocks are definitely leading the charge at this stage. Despite the firmer rand, there seems to be a lot of demand for the gold stocks, mainly because precious metals are generally considered save havens amid uncertainties. The political uncertainty at this stage as we know is in the Middle East and North Africa," said Ian Cruickshanks, head of Treasury Strategic Research at Nedbank.
But Kunze questioned whether these gains would last for the day, given that the US market was closed for a public holiday.
Dow Jones Newswires reported that European stock markets were steady on Monday as escalating tensions in the Middle East continued to rattle sentiment, although investors remained bullish on equities overall.
This bullish sentiment was underlined by some upbeat euro-zone economic data. The 'flash' February purchasing managers' indexes for the region came in higher than expected, and above January's levels, while Germany's Ifo index for February also came in above expectations and above January's level.
London's FTSE 100 was up 0.3% at 6 102.98, Frankfurt's DAX was up 0.1% at 7 432.63 and Paris's CAC-40 was up 0.1% at 4 162.19.
In Asia Monday, share markets were mostly lower amid the escalating unrest in the Middle East and the surge in crude oil prices.
Japan's Nikkei Stock Average was up just 0.1%, while South Korea's Kospi Composite fell 0.4%. China's Shanghai Composite index rose 1.1% while Hong Kong's Hang Seng index fell 0.5%.
