EU deal triggers JSE relief rally

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Independent Newspapers

The JSE. Photo: Simphiwe Mbokazi.

The JSE lifted more than 1% during its opening session on Friday before easing back‚ as a European Union deal triggered a global risk-assets rally.

At 09:21 local time‚ the JSE all-share index was up 0.90% at 33‚550.43 points‚ with resources recovering 1.57%‚ gold shares gaining 0.46% while platinum counters added 0.48%.

Financials were up 0.51%‚ banking stocks edged up 0.29% and industrials were 0.67% in the black.

The rand was firmer at 8.31 to the US dollar‚ from 8.43 at the JSE’s close on Thursday‚ while gold was quoted at US$1‚569.95 a troy ounce from US$1‚553.25/oz at the JSE’s previous close and platinum recovered to $1‚413.70/oz‚ from $1‚395.70/oz previously.

“It is a step in the direction. The EU deal will encourage market players to take more risk. But it remains to be seen how this is going to be implemented‚” said Francois du Plessis‚ director at Vega Asset Management.

European stocks opened higher as investors welcomed an agreement by eurozone leaders for banks to receive aid directly from the region’s permanent bail-out fund‚ without adding to government debt.

At meetings in Brussels‚ eurozone leaders agreed that the permanent bail-out fund‚ the European Stability Mechanism‚ would not have senior creditor status when it takes over the loans granted to Spanish banks‚ Dow Jones Newswires reported.

European Council president Herman van Rompuy said eurozone banks would be able to directly access the bailout mechanism once a single bank supervisor was established. They also agreed that implementing additional austerity may not be a necessary precondition for funds to be disbursed.

A growth pact involving some EUR120bn ($149.5bn) in stimulus measures was agreed‚ which includes a promise of new capital for the European Investment Bank‚ and measures to speed up and better target as much as EUR55bn in EU budget funds.

London’s FTSE 100 index was up 1.68% at 5‚585.42 points.

Asian stocks also rallied on the EU deal‚ with Japan’s Nikkei ending the session 1.5% higher‚ while Hong Kong’s Hang Seng index shot up 2.49% by 09:21 SA time.

On the JSE‚ Anglo American (AGL) rallied R5.97‚ or 2.26%‚ to R269.62‚ BHP Billiton (BIL) gained R5.23‚ or 2.32%‚ to R230.95 while Sasol (SOL) garnered R2.28 to R341.97.

AngloGold Ashanti (ANG) was up 90 cents to R284‚ Gold Fields (GFI) rose 82 cents to R104.58 and Harmony Gold Mining (HAR) inched up 26 cents to R76.40.

In platinum stocks‚ Anglo American Platinum (AMS) was up R2.50 to R469.50 and Lonmin (LON) gained R2.50‚ or 2.59%‚ to R99.

Among other miners‚ ArceloMittal SA (ACL) lifted 63 cents‚ or 1.22%‚ to R52.43 and Exxaro (EXX) gained R2.66‚ or 1.41%‚ to 191.27.

In industrials‚ SAB (SAB) was up R3.94‚ or 1.21%‚ to R330 and Richemont (CFR) recovered 52 cents‚ or 1.19%‚ to R44.35.

In telecoms‚ Telkom (TKG) recovered 29 cents‚ or 1.54% to R19.09.

Among banks and financials‚ Nedbank (NED) was up R1.01 to R169.20 while RMB Holdings (RMH) lifted 39 cents‚ or 1.14%‚ to R34.69.

Among construction shares‚ Basil Read Holding (BSR) gained 28 cents‚ or 2.32%‚ to R12.35. The company announced late yesterday that it had concluded a R521m broad-based black economic empowerment (B-BBEE) agreement with Sishen Iron Ore Company Community Development Trust Investments Holdings.

This will result in Sishen Iron Ore Company holding an effective 25.1% in the Johannesburg-listed construction company. - I-Net Bridge


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