Higher metal prices lift JSE’s commodity shares

Asian markets were weak following the BoJ’s decision not to ease monetary policy or to add stimulus

THE JSE closed firmer yesterday as metal prices rose, buoying commodity shares such as gold counters, after the Bank of Japan (BoJ) kept its monetary policy unchanged, surprising many market participants.

At 5pm, the all-share index closed 0.30% higher at 53,224 points, with gold miners the main gainers, surging 5.67% on a stronger gold price. Just after the JSE’s close, the spot price of gold was up 1.43% to $1,263.99 an ounce.

The platinum index was up 3.30% as the price of platinum also gained, last up 2.45% to $1,044.18. Resources lifted 3.16%.

IG trader Shaun Murison said the local market traded in disparity to the “usual international influencers” for most of the day, trading firmer while Asian and European markets were in negative territory.

Asian markets were weak following the BoJ’s decision not to ease monetary policy or to add stimulus, he said. “The dollar did, however, resume its short-term weakness following Wednesday night’s Federal open market committee meeting in the US and, in turn, local resource counters buoyed the JSE.”

The US Fed announced that it would leave interest rates unchanged.

The Federal Reserve said in its policy statement on Wednesday that “growth in economic activity appears to have slowed”.

US gross domestic product data fell short of consensus estimates yesterday, reflecting first quarter 2016 growth of 0.5% from an estimated 0.7%, Mr Murison said.

Global stocks fell and the yen soared yesterday after the BoJ’s decision caused the Japanese Nikkei Stock average to erase earlier gains to close down 3.61%, Dow Jones Newswires said.

The BoJ pushed back its inflation target at the conclusion of its monetary policy meeting, but said it would maintain its current easing programme, keeping the deposit rate at minus 0.1% and its asset purchases unchanged at ¥80trillion, the newswire said.

Among individual shares on the JSE, Anglo American surged 9.01% to R152.99, after the global miner said it had agreed to sell its niobium and phosphates businesses in Brazil to China Molybdenum for $1.5bn to cut debt.

Sasol gained 2.56% to R471.35 as the price of Brent crude had lifted 0.96% to $47.63 a barrel soon after the JSE’s close.

Banking counter Barclays Africa closed 3.34% higher at R149.66 after a Business Day report that a consortium, headed by former Barclays CEO Bob Diamond, aimed to acquire a significant interest in the banking group.

AngloGold Ashanti climbed 6.15% to R220.10 and Harmony leapt 6.11% to R47.74.

Platinum player Lonmin closed 5.17% higher at R38.84.

The rand surged against major currencies yesterday afternoon in the wake of the BoJ and US Fed decisions.

At 6pm the rand was trading at R14.2533 to the dollar from R14.4174 at Wednesday’s close. It was at R16.1425 against the euro from R16.3211 previously‚ and at R20.7918 against the pound from R20.9594 previously. The euro was at $1.1325 from $1.1322. South African bonds were also firmer late yesterday after finding support from the Fed’s decision. At 6pm the benchmark R186 bond was bid at 9.025% and offered at 9.035% from Tuesday’s close of 9.08%. The middle-dated R207 was bid at 8.455% and offered at 8.46% from a previous close of 8.51%.

Local futures tracked the JSE higher. With Madeleine van Niekerk