Johannesburg – The JSE continued its firm run in midday trade on Wednesday led by commodities, and in line with global sentiment.
A local trader noted that the JSE did not react to better than expected consumer price index (CPI) data, which is used by the South African Reserve Bank (Sarb) for its inflation target. CPI was up 4.8 year-on-year (y/y) in April from 5.1% y/y in March, Statistics South Africa (Stats SA) said on Wednesday.
CPI was expected to have registered 5.0% year-on-year (y/y), according to a survey of leading economists by I-Net Bridge.
By 12:00 the JSE all share index was 2.02% firmer, with resources 2.26% better off, and platinum miners 3.36% firmer. Gold miners gained 0.83%.
Banks ticked 1.89% higher, financials added 1.42%, and industrials were 2.01% stronger.
The rand was bid at R7.81 to the dollar from R7.96 at the JSE's close on Tuesday. Gold was quoted at $1 212.80/oz a troy ounce from $1 198.67/oz at the JSE's last close. Platinum was at $1 537/oz from $1 490.70/oz at the JSE's last close.
A local equities trader said: "We continue to track global markets, but we remain volatile on a day to day basis, having added 500 points on Monday, but then giving 500 points away yesterday.
"Commodity stocks are up amid firmer metal prices," he said.
Dow Jones Newswires reports that US stocks are expected to open higher on Wednesday, after the main indexes managed to finish well off lows in the previous session. GFT called the DJIA up 50 points at 10 093 and the S&P 500 up five at 1079. The group noted that investors would look to see whether US markets can capitalise on Tuesday's small rally and reverse recent trends. US durable goods orders are at 1230 GMT, followed by April new home sales, which could offer some direction, said GFT. The Dow front month futures contract trades +0.6% at 10 088.0.
European stock markets rose sharply on Wednesday, with Wall Street's late rebound on Tuesday boosting confidence despite continuing worries about the health of the euro and the tensions on the Korean peninsula.
At the same time, the euro remained weak in early European business. German bunds eased back, while oil and gold prices rose.
It has been encouraging to see buyers willing to step up to the plate, both on Monday and Wednesday, to purchase beaten-up blue-chip names, said IG Markets. "This confidence has not been evident in recent weeks and likely marks a small, but important change in underlying sentiment," it said.
Asian markets ended higher on Wednesday after a late-session recovery on Wall Street on Tuesday helped whet appetite for stocks, with shipping and resource companies leading the charge on upbeat freight rates and a rebound in commodity prices.
"After the US indexes pared most of their earlier losses yesterday, some people are hunting for bargains on the expectation that the stock market may find support" near current levels, said Park Seok-hyun at KTB Securities in Seoul.
Japan's Nikkei Stock Average climbed 0.7%, % and Taiwan's Taiex rose 1.1%. China's Shanghai Composite Index inched up 0.1%, while Hong Kong's Hang Seng Index gained 1.1% and South Korea's Kospi expanded 1.4%.
