Cheery US outlook boosts JSE, but gold still gloomy

STOCKS climbed for a second consecutive day yesterday as a slightly brighter outlook for the US economy from the Federal Reserve (Fed) boosted shares of resource firms.

closed 2.83 percent higher at R418.50 ahead of a futures close-out and after China’s Tencent – of which the local media firm owns about 30 percent – posted a jump in fourth-quarter profit.

“The resources shares are picking up quite nicely,” said Rigardt Maartens, a portfolio manager at PSG Online Securities. “The only thing that is pulling the market down is the gold sector; the gold price is looking very weak.”

The Fed on Tuesday described US economic output as “expanding moderately”, compared with the “modest” growth mentioned in its previous statement.

On the local bourse, the blue chip Top40 index rose 0.72 percent to 30 521.67 points. The broader all share index edged 0.74 percent higher to 34 426.74 points.

extended gains from the previous day, advancing 2.35 percent to R131.50.

gained 1.37 percent to R162.20, lifted sessions to close 2.37 percent higher at R550.

But shares of gold producers tumbled after the price of gold fell to its lowest since midJanuary as the Fed’s comments put an extra zip in the dollar and gave investors an excuse to lighten holdings of bullion.

fell 2.77 percent to end at R291.73,

shed 2.52 percent to R87.35 and lost 1.06 percent to R108.83.

Trade was relatively active with 297 million shares changing hands, according to preliminary bourse data, down from the daily average of 256 million sold last year.