The JSE closed at its highest level since late May on Tuesday, boosted mainly by mining stocks and the major industrial firms.
The all share ended 1.08% higher at 71,504.69 points, as the resource 10 index jumped 3.27%, the biggest gain since July 22, according to data compiled by Iress.
The rebound in the resources industry comes off a low base, with the sector’s sub-index still down nearly 8% so far this year. Still, Sanlam Wealth portfolio manager Gregory Katzenellenbogen said the mining sector is likely to benefit as key commodity consumer China stimulates its economy after the damaging lockdown restrictions to control the spread of Covid-19.
Elsewhere, Naspers was the top gainer among the large-cap industrial stocks, while Richemont took a breather after a stellar performance over the past month.
The gauge of banking shares ended higher for the ninth straight session and was back to levels last seen in early July, suggesting renewed investor confidence in the sector. Banks have also benefited from the rising interest rate environment that tends to fatten the margins of their loan portfolios.
The banking index ended 0.58% higher while the financial index, which includes insurance stocks, gained 0.5% ahead of the sector’s reporting period later in August.
Other domestically-orientated stocks were also higher on day, benefiting from the improved sentiment on global markets.
Global equities have been steadily gaining ground since July, boosted in part by apparent signs of easing inflation, which has reduced the likelihood of aggressive hike in interest rates by central banks.
“It seems investors are gaining confidence amid a recovery in stock markets in recent weeks rather than feeling anxious about its sustainability against a worrying economic backdrop,” Craig Erlam, senior market analyst at Oanda, said in a note to clients.
“I wonder how long that can last even if US inflation shows further signs of pulling back from the peak. Recessions around the world are coming and inflation is not falling fast enough.”
On the currency markets, the rand had gained 0.23% to R16.4173/$ by 6.45pm and by 0.17% to R16.6816/€. Brent crude fell 0.85% to $92.71 per barrel, and gold was 0.17% softer at $1,775,69/oz. But platinum rose 0.11% to $932.70 and palladium was up 0.28% at $2,155/oz.
mahlangua@businesslive.co.za
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