JSE jumps as miners rally on weaker dollar and oil

The JSE rallied on Thursday as hopes of an earlier end to the war with Iran lifted precious metals prices and sent oil lower, with investors linking those prospects to the Democrats’ victory in the US midterm elections.

The local market was catching up with two days of international developments after being closed on Wednesday for local government elections.

While South Africans had also taken to the polls this week, the movements in local financial markets were largely driven by global factors, particularly the US election.

At the close of trade, the all-share index was up 3.67%, after reaching an intraday gain of 5%, while the Top 40 added 3.99%. The resources index was 2.78% higher, with the precious metals and mining index gaining 4.27%.

“Our market is essentially pricing in two days of news into one session,” said Shaun Murison, senior market analyst at Rand Swiss. “The US election is what we’ve reacted to primarily, the Democrat win.”

Democrats won control of both chambers of the US Congress in Tuesday’s midterm elections, ending Republican majorities in the House of Representatives and Senate. The result means President Donald Trump will have to work with a Democrat-controlled Congress from January 2027.

Investors have interpreted the election result as increasing the likelihood of political pressure on the Trump administration to end the war with Iran sooner. The conflict has disrupted oil supplies and pushed up energy prices, making the prospect of easing tensions important for inflation and financial markets.

Murison said oil prices had fallen sharply on hopes that the war could end sooner, easing inflation concerns. A weaker dollar and lower US yields had also improved risk sentiment.

Brent crude fell to about $96.71 a barrel on Thursday, from near $118 last week.

Anabel Bishop, chief economist at Investec, said the weaker dollar and reduced demand for safe-haven assets had also supported the rand, which strengthened to R16.36/$ from R16.74/$ last month.

At 7.07pm on Thursday, the rand had weakened 0.2% to R16.45/$.

Bishop said lower oil and fuel prices could ease inflation and reduce expectations of further US interest rate increases.

“Energy prices are likely to remain lower towards the end of 2026 and into 2027, despite some volatility,” she said.

AngloGold Ashanti gained 3.56%, Gold Fields 3.25%, and Harmony was up as much as 6.4%, while Northam Platinum added 5.56%.

Business Day