Bargain-hunting keeps JSE afloat

The JSE stayed firmer as bargain-hunting helped prop up an otherwise panicky market.

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The JSE stayed firmer at noon on Tuesday as bargain-hunting helped prop up an otherwise panicky market. But the slightly stronger rand kept gains in check in a market that was drifting sideways, an equity analyst said.

Standard & Poor's cut its outlook on US government debt on Monday, rattling investors and sparking a huge sell-off.

By 12:07 local time, the JSE all-share index was up 0.94%, with resources firming 0.95%, gold miners rising 0.23% and platinum counters gaining 0.30%. Industrials found 1.17%, financials picked up 0.43% and banks were 0.52% higher.

The rand was bid at 6.82 to the dollar from 6.87 at the JSE's close on Monday. Gold was quoted at US$1,494.87 a troy ounce from US$1,490.26/oz at the JSE's previous close, while platinum was at $1,786/oz, from $1,784.50/oz previously.

The sell-off was overdone yesterday, the equity analyst said. The market has rebounded on bargain hunting, but there seemed to be concerns over the European and US debt, he said.

Dow Jones Newswires reported that European stock markets moved higher on Tuesday, with strong corporate earnings from the region together with better than expected euro-zone manufacturing data offsetting the caution sparked by Standard & Poor's Monday downgrade of the US economy's outlook.

Although reverberations of S&P's move on the US economy are still being felt, the market is looking to recover from the shock and investors are demonstrating willingness to snap up stocks battered in the previous session, traders said.

Jim Reid, strategist at Deutsche Bank, said S&P's action on the US economy was just the first landmark step rather than a sign of imminent stress.

Moreover, in light of the rating agencies' patchy recent record, investor attention will soon switch away from their opinions and back to the more immediate realities of central bank policy action, said Altium Securities' strategist Ian Williams.

At 10:07 SA time, the benchmark Stoxx Europe 600 index was up 0.6% at 274.61. London's FTSE 100 index was 0.6% higher at 5,908.23, Frankfurt's DAX index was 0.5% higher at 7,059.33, and Paris's CAC-40 index gained 0.6% to 3,903.12.

On the JSE, Anglo American (AGL) rose 5.99 rand or 1.80% to 338.99 rand, BHP Billiton (BIL) gained 2.84 rand or 1.04% to 276.00 rand and Sasol (SOL) was up 1.51 rand to 361.71 rand.

Among gold counters, Harmony (FAR) firmed 1.77 rand or 1.78% to 101.02 rand, and DRDGold (DRD) climbed seven cents or 1.94% to 3.67 rand.

DRDGold confirmed that it planned to sell its Blyvooruitzicht (Blyvoor) operations. Blyvoor produced 30,511 ounces in the March quarter, accounting for close to half of DRDGold's total output of 67,387 ounces.

The sale will leave DRDGold with only the Ergo and Crown operations in its stable.

Among platinum stocks, Lonmin (LON) collected 3.09 rand or 1.77% to 177.89 rand and Eastern Platinum (EPS) rallied 20 cents or 2.53% to 8.10 rand.

Diversified miner Exxaro (EXX) gained 1.72 rand or 1.04% to 166.96 rand and African Rainbow (ARI) was up 2.99 rand or 1.47% at 206.84 rand.

In the industrial sector, Richemont (CFR) jumped 83 cents or 2.15% to 39.36 rand and SABMiller (SAB) collected 4.19 rand or 1.73% to 246.70 rand.

The global brewing group on Tuesday reported that, on an organic basis, lager volumes for the year ended March were 2% ahead of the prior year, with growth of 3% in the fourth quarter. Full-year and fourth-quarter soft drinks volumes grew 3% on an organic basis.

The group said in a trading update that all divisions other than North America grew volumes during the second half of the year. Group revenue for the full year grew by 5% on an organic, constant currency basis, with group revenue per hectolitre growth of 3% on the same basis.

Packaging group Nampak (NPK) lost 50 cents or 2.33% to 21.00 rand.

Mobile phone operator MTN (MTN) gained 3.35 rand or 2.57% to 133.85 rand.

Banking group Nedbank (NED) picked up 2.23 rand or 1.65% to 137.73 rand.

Retailer Pick n Pay (PIK) fell 21 cents to 41.59 rand. Yesterday, the company plunged 5.43% after reporting diluted headline earnings per share of 162.10 cents for the year ended February, a decrease of 23% from 210.62 cents a year ago. Headline earning per share were at 189.35, down 18.3% from 231.71 cents.

Construction firm WBHO (WBO) slid 2.73 rand or 2.39% to 111.28 rand.

Media giant Naspers (NPN) surged 12.03 rand or 3.43% to 363.03 rand.

Astral (ARL) was 2.21 rand or 1.76% higher at 128.00 rand. The poultry producer said on Tuesday that earnings and headline earnings per share for the six months ended March 31 were likely to reflect an increase in the range of 28% to 33% compared with the previous corresponding period. - I-Net Bridge

Source: http://www.iol.co.za/bargain-hunting-keeps-jse-afloat-1.1058932

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