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JSE muscles to record high with commodity stocks riding the war wave

Stocks on the JSE climbed to another record high yesterday supported by financials, tech stocks and commodity-linked stocks as sanctions on Russia continue to bite. Photo: African News Agency (ANA) Archives

Stocks on the JSE climbed to another record high yesterday supported by financials, tech stocks and commodity-linked stocks as sanctions on Russia continue to bite. Photo: African News Agency (ANA) Archives

Published Mar 2, 2022

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STOCKS on the JSE climbed to another record high yesterday supported by financials, tech stocks and commodity-linked stocks as sanctions on Russia continue to bite.

Market fears of a possible prolonged Russia-Ukraine war stocked an increase of various commodities while investors continued to assess the Ukraine crisis.

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The JSE All Share index rose more than 1.2 percent to a fresh record high of 77 303 index points hit during an early trading session before softening just below 77 000 points at 5pm.

Investment holding company PSG Group' stock saw the biggest rise with an 18.6 percent rise to R97.01 per share, followed by Exxaro Resources at 8.8 percent to R215.42 per share.

Gold prices approached a 13-month high yesterday, climbing above $1 920 (R29 554) an ounce and closing in on its strongest level since January 2021.

Analysts said that disruptions to supplies from grain, energy and metals were adding to price pressures, at a time the Federal Reserve was preparing to raise interest rates.

Anchor Capital's portfolio manager, Martin Smith, said the JSE had reacted very well on a relative basis to Russian sanctions compared to other emerging markets.

“I think it has to do with the commodity side of things. Even when we saw an aggressive sell-off in February when the announcement was made regarding Russia and Ukraine, we have seen a V-shaped recovery and we are holding it together very well,” Smith said.

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In intraday trade Sasol rose 5.8 percent to R371.06 per share as oil prices hit a fresh 2014 high yesterday.

Brent crude prices soared more than 6 percent toward $104 a barrel as the possible release of strategic crude reserves by the US and its allies were not enough to offset concerns over Russian supply disruptions.

The US and other countries are considering releasing between 60 million and 70 million barrels of Brent crude, an equivalent to less than 6 days of Russian output.

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Meanwhile, Opec+ countries will meet today to discuss output policy, where it is expected to stick to its plan of moderate supply increases despite market turmoil brought by the invasion.

South African manufacturing and automotive industries yesterday expressed concern about the escalating geopolitical tension and how it could disrupt global trade.

Oxford Economics also warned that the global growth trajectory will be affected by the duration and severity of the war.

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However, Business Unity SA (Busa) said the direct economic impact on South Africa was minimal, at least for now.

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