JSE strong on ECB comments

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The JSE. Photo: Simphiwe Mbokazi.

The JSE was trading stronger at noon on Friday‚ on markets’ continued positive momentum after European Central Bank (ECB) president Mario Draghi pledged on Thursday to save the euro‚ and despite disappointing results from Anglo American.

The focus now is on US second-quarter gross domestic product (GDP) data due late in the afternoon‚ that will set the tone for markets over the next few months.

“There is still positive momentum in the local market after the president of the ECB’s comments and regardless of Anglo American’s very disappointing results out this morning‚ being the key future in the local market today‚” said Francois du Plessis‚ director at Vega Asset Management.

“I do not think we will see much of a big surprise in the US growth figures‚ with slower GDP expected. Annualised second quarter growth of 1.4% is expected from annualised growth of 1.9% in the first quarter‚” he said.

During a speech in London yesterday‚ Draghi said the ECB was ready to do whatever it took to preserve the common-currency union. The comments were made against a backdrop of climbing Spanish bond yields‚ which reached a euro-era high of 7.7% on Wednesday‚ stoking concern that the bank bail-out agreed on in June might not be sufficient to stabilise Spain’s ailing economy.

The next step will be to see whether the ECB will deliver‚ as attention shifts to the central bank’s policy meeting next week.

There was also rising hope that the US Federal Reserve would undertake more monetary stimulus when its Federal Open Market Committee meets next week‚ Dow Jones Newswires reported.

At 12:04 local time‚ the all-share index was up 0.51% to 34‚464.43 points‚ while in London‚ the FTSE 100 was flat (-0.03%) at 5‚571.64 points.

Asian markets rose on Friday on the reassurance from Draghi. Hong Kong’s blue-chip Hang Seng index rose 382.17 points‚ or 2.02%‚ to 19‚274.96‚ marking the index’s largest percentage rise since it gained 2.3% on June 15. In Japan the Nikkei was up 123 points‚ or 1.46%‚ at 8‚566.64 points.

Local big movers at noon were Gold Fields (GFI)‚ up R4.36‚ or 4.17%‚ at R108.89 and Harmony (HAR)‚ up R1.85‚ or 2.32%‚ at R81.60.

Platinum counters showed good gains‚ with Impala Platinum (IMP) up R2.89‚ or 2.26%‚ to R130.89‚ Northam Platinum (NHM) gaining 35 cents‚ or 1.39%‚ to R25.55 and Amplats (AMS) adding R8.49‚ or 2.08%‚ at R416.99.

Anglo American (AGL) slumped R10.81‚ or 4.23%‚ to R245.00‚ after the resources giant posted a 38% decline in group operating profit to US$3.7bn in the six months to June 2012‚ compared with the same period a year earlier‚ while profit attributable to equity shareholders declined 70% to $1.21bn.

An interim dividend of 32 cents was declared compared with 28 cents a year ago – a 14% increase.

Banking counter Absa (ASA) rose 61 cents to R136‚31 after the bank reported a 6% decline in diluted headline earnings per share to 602.3 cents in the six months ended June 2012‚ from 638.5 cents a year ago. - I-Net Bridge


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