JSE has best month in over a year as gold miners shine
The JSE had its best monthly performance in more than a year in June, contributing to a 10.37% rise in the bourse in the first half of the year as global equities cheered dovish signals from the US Federal Reserve.
The all share index is now about 6% away from its record high of 61,776.7 points reached in early 2018, with gains on the local bourse coming despite troubling domestic news, including SA’s 3.2% contraction in GDP in the first quarter.
About 90% of the all share’s direction had been determined by international factors, said Wayne McCurrie of FNB Wealth & Investments.
The index added 4.59% in June, with gold and platinum mining companies faring best as the former added 24.47% in the month. The gold index is up 46.11% so far in 2019 and the platinum index has increased by 63.21%.
Gold has been boosted by the dovish messages from the Federal Reserve , while tensions in the Middle East have also helped push bullion higher.
Gold has risen to a six-year high in dollar terms, closing flat on Friday at $1,406.63/oz after having gained almost 8% in June.
Investors were cautious and did not want to be caught unawares ahead of the meeting between US President Donald Trump and Chinese President Xi Jinping, said London Capital Group senior market analyst Ipek Ozkardeskaya.
That meeting on Saturday resulted in agreements from both sides to resume trade talks, to the undoubted relief of the market, analysts said.
“This will likely come as a relief to markets and should anchor sentiment in the short term,” said Vanguard Markets managing partner Stephen Innes on Sunday.
The trade truce offers the prospect of respite for the markets from the trade war, which has been blamed for slowing global growth.
The all share index looks set to be further driven by external events, McCurrie said. A trade truce means that it is poised to benefit from an improved global risk appetite.
Source: businesslive.co.za
