JSE tracks global markets stronger

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JSE1 Independent Newspapers The JSE. Photo: Simphiwe Mbokazi.

The JSE was trading in positive territory at noon on Monday‚ continuing from Friday’s positive trade.

Some stocks came were trading lower than would have been expected‚ due to dividends being paid today. These included Vodacom (VOD) losing 3.2%‚ a local trader said.

“The JSE has responded well to the news of the positive outcome of the Greek elections‚ and local markets are in positive territory as a result‚” the trader added.

A narrow victory was achieved by the Greece's pro-bailout party New Democracy‚ with investors now looking out for details from the G-20 summit in Mexico today.

At 11:54 local time‚ the JSE all-share index was up 0.74% to 34‚211.41 points‚ with resources gaining 0.61%‚ while gold counters were down 0.23%‚ and platinums jumped 1.76%.

Financials were up 0.97%‚ banking stocks gained 1.09% and industrials added 0.73%.

The rand was trading at 8.31 to the US dollar‚ from 8.37 at the JSE's close on Friday‚ while gold was quoted at US$1‚624.22 a troy ounce from $1‚628.80/oz at the JSE's previous close and platinum was at $1‚488.50/oz‚ from $1491.20/oz previously.

Dow Jones Newswires reported the FTSE 100 was up 0.15% to 5‚487.24 at 11:39 local time after having started the session up over 1% after the New Democracy party won the Greek election and sought to form a coalition government. The relief in markets saw banks and mining stocks leading the gains. The Group of 20 industrial and developing nations‚ gathering in Los Cabos‚ Mexico‚ today must show leadership and come to grips with threats to the world economy that included the eurozone crisis and high sovereign debt.

Greece's conservative New Democracy party will begin talks with peers today on forming a pro-bailout coalition government after eking out a slim victory in Sunday's elections‚ which‚ if successful‚ will end a weeks-long political stalemate and paved the way for Greece to resume negotiations with international creditors on badly needed aid.

Meanwhile‚ bad debts held by Spanish banks rose to an 18-year high in April‚ data released on Monday by the country's central bank showed‚ a sign that more companies and households in the eurozone's fourth-largest economy fell behind on debt payments amid a double-dip recession.

The euro gave up its post-Greek election gains against the dollar on Monday‚ falling back down to levels last seen late Friday as doubts resurfaced over the formation of a strong Greek government able to help the eurozone through its crisis and as Spanish borrowing costs rose to a euro-era highs.

The outcome of the Greek election sparked a rally in risk assets in Asia on Monday as investors were cheered by the victory of the pro-bailout New Democracy party‚ though the gains moderated in some markets as the day progressed. “It is a relief rally more than anything else‚” said Christopher Wong‚ senior investment manager at Aberdeen Asset Management in Singapore. “The pro-bailout party is going to try creating a coalition‚ but that is just kicking the problem down the road.”

New Democracy leader Antonis Samaras‚ has vowed to respect the country's commitment to a EUR173bn ($218.6bn) bailout agreement with the European Union and the International Monetary Fund‚ and invited all the parties that support Greece's membership of the euro to join a national “salvation” government.

The election victory gave stocks an immediate boost. The standout benchmark was Australia's S&P ASX 200‚ which finished 2% higher at 4‚136.90‚ its biggest rise for more than five months.

Other markets gained heavily‚ but retreated slightly in the session. Japan's Nikkei closed 1.77% higher at 8‚721.02 and South Korea's Kospi also climbed 1.8% to 1‚891.71. Hong Kong's Hang Seng Index closed 1.01% higher at 19‚427.81 and the China Shanghai Composite gained 0.4% to 2‚316.05.

Investors will also be looking to see what policymakers decide at a series of key meetings this week - such as a summit of G20 leaders in Mexico and a meeting of the Federal Reserve. Another important point on the horizon is a summit of European leaders at the end of the month.

“Until we find out what the European leaders deliver at the summit at the end of the month in terms of broad progress toward a better-functioning monetary union‚ the downside risks from Europe are going to remain‚” said John Horner‚ a Deutsche Bank currency strategist in Sydney.

On the JSE‚ Anglo American (AGL) was up R1.20‚ to R277.70‚ BHP Billiton (BIL) added R1.44 to R237.50 and Sasol (SOL) was up R4.78‚ or 1.31%‚ to R368.60.

AngloGold Ashanti (ANG) was down 49 cents to R303.99‚ while Harmony Gold Mining (HAR) shed 10 cents to R85.34 and Gold Fields (GFI) lost 88 cents to R111.51.

In platinum stocks‚ Impala Platinum (IMP) was up R2.52‚ or 1.74%‚ to R147.20‚ Northam Platinum (NHM) gained 26 cents to R26.64‚ while Aquarius (AQP) was off 11 cents‚ or 1.40%‚ to R7.75. Lonmin (LON) jumped another R3.45‚ or 3.54%‚ to R100.79‚ after Goldman Sachs raised its price target for the company on Friday.

Among other miners‚ Exxaro (EXX) was up R4.46‚ or 2.18%‚ to R208.70.

In industrials‚ SAB Miller (SAB) gained R2.69 to R321.34‚ while British American Tobacco (BTI) left behind 89 cents to R406.87.

Among banks‚ Standard Bank (SBK) went up 84 cents to R113.06‚ while Firstrand (FSR) gained 37 cents‚ or 1.40%‚ to R26‚81‚ Absa (ASA) recovered R1.71‚ or 1.12%‚ to R154.71 and Rand Merchant Bank (RMH) was 75 cents‚ or 2.18%‚ stronger at R35.10.

In the construction sector Group 5 (GRF) shed 48 cents‚ or 2.01%‚ to R23.40‚ while Cashbuild (CSB) picked up R2.07‚ or 1.53% to R136.99.

In retail‚ Pick n Pay (PIK) was down 72 cents‚ or 1.64%‚ to R43.16. - I-Net Bridge


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