JSE rockets on strong risk-on sentiment on Zuma move

THE JSE surged yesterday‚ closing at a three-week high on strong risk-on sentiment following the election of Cyril Ramaphosa as the new president‚ a day after Jacob Zuma quit.

Risk-on trade dominated the market‚ with banks the biggest recipients.

At a stage‚ in midday trade‚ the all-share had jumped more than 4%‚ its biggest one-day gain in three years.

Blue-chip stocks were sharply higher‚ with Bidvest gaining nearly 10% and Naspers 7%. Despite some property stocks gaining strongly‚ the property index struggled for most of the day‚ closing lower.

Resilient lost hugely, with the property group and other companies in its stable a victim of a renewed sell-off. Resilient dropped 11.72% to R84.75. The rand reached a three-year best level of R11.5997 to the dollar, before softening towards the JSE’s close.

Zuma’s departure offered a new opportunity under a Ramaphosa administration to correct Zuma’s economic blunders‚ analysts said. “With the positive moves in the country over the past few days‚ and the strong market reaction‚ the economy is likely to recover more quickly‚” Nedbank chief economist Dennis Dykes said.

The hope is that ratings agency Moody’s will hold off from a further credit-rating downgrade.

The all-share closed 3.72% higher at 59 533.1 points‚ the highest daily percentage gain since December 2014‚ while the Top 40 gained 3.97%.

Banks rose 5.78%‚ the platinum index 4.35%‚ general retailers 4.17%‚ industrial shares 3.97%‚ financial stocks 3.72% and resources 3.14%. Property shed 0.13%.

The JSE was also supported by global markets‚ with European stocks up on higher growth prospects in the eurozone. The Dow opened higher.

Barclays Africa jumped 7.78% to R205.75‚ Nedbank 5.37% to R290.83‚ FirstRand 6.43% to R75.35 and Standard Bank 5.13% to R218.60.

Discovery rose 9.13% to R180.10 and Sanlam 7.26% to R96. – BusinessLIVE