The JSE closed higher in volatile trading on Tuesday as platinum shares helped the index gain ground, but banks and financials receded.
The market was looking for direction most of the day after bargain hunting initially dominated trading. But new highs from Sasol and Naspers boosted sentiment. Platinum shares were higher on the prospects of a weaker currency and suspected supply constraints, with the price remaining stable.
Global markets provided little support with the Dow Jones only 0.20% up at the close. The FTSE 100 was 0.27% higher with the Paris CAC 40 gaining 01.4%. The Hang Seng closed 0.12% higher.
At 5pm the all share closed 0.61% higher at 47 612.81, with the top 40 index collecting 0.75%.
All the major indices, barring banks and financials, were up. Platinum climbed 1.59%, with resources gaining 1.19%. Gold was 0.96% stronger and industrials in the green by 0.65%. But banks lost 0.40% and financials 0.30%.
Market analyst at Vunani Private Clients Viv Govender said some negative news initially weighed on the market. This included indications that government was going ahead with the controversial Mining Bill. It gives government powers over the mineral, oil and gas industries, including greater state participation in ownership. “This could discourage investment,” he said.
There were no real drivers, with early morning trading uneventful, Mr Govender said.
There was also some initial uncertainty about why platinum shares rose so firmly. Market players say stockpiles are probably getting lower due to the strike, with possible supply disruptions indicating a higher price, thereby boosting investments in selected platinum counters.
“But you have to ask yourself if you are not producing anything, how can you become more valuable even if prices have been going up?,” Mr Govender said.
The RMB/BER confidence index fell two points to 41 in the first quarter of 2014, weighing on sentiment. Some shares fell sharply during the day, including Kumba, JD Group and Capitec.
Among individual shares Sasol (SOL) closed 0.91% higher at R585.04, a new record, as higher oil prices and a weaker rand painted a more positive full year earnings picture after recent strong interim results. Possible higher dividends also attracted investors. That boosted sentiment among other resources groups with Anglo (AGL) up 2.35% to R261.61.
Naspers (NPN) climbed 3.76% to a new high of R1354.09 on news that Chinese subsidiary Tencent could be making inroads into competitor Alibaba’s market share. Fellow player in the media sector, Times Media Group (TMG), closed 6.60% higher at R21 on a trading statement indicating expected higher interim earnings.
Kumba Iron Ore (KIO) closed 5.38% lower at R369 amid a lower iron ore price and expectations of more subdued Chinese growth. In contrast Amplats (AMS) in the platinum sector raced 1.14% higher to R445.77 and Impala Platinum (IMP) collected 1.96% to R117.13. Lonmin (LON) was up by 2.26% to R53.32.
Among gold shares Gold Fields (GFI) gained 4.08% to R42.36.
Capitec (CPI) lost 1.83% to R188 with JD Group (JDG) weakening 6.05% to R19.40. It previously announced a planned rights issue to augment depleted capital due to rising bad debts from its unsecured lending division.