Stocks Surge, Reversing Losses
May 05, 2011
The All Share Index leapt 107 points to close at 6564. All sectors were targeted by local and foreign buyers, with the Industrial Index gaining 78 points to 7733, and the All Gold Index putting on 43 points, or 2.5%, to 1740. Brokers said the market received a healthy boost from a stronger rand, lower bond yields and a stable gold price. South African Federico made one of the biggest comebacks after several days of losses in the industrial sector, surging ahead 5 rand to close at 122.50. Bank stocks, another sector largely out of favor in recent weeks, showed improvement Friday, with Nedcor gaining 3 rand, or 5.5%, to 58. Amalgamated Banks of South Africa rose 20 cents to 20.40 rand, and First National Bank put on 1 rand to 27.50. Standard Bank Investment rounded out a positive day for the banking sector, climbing 7.50 rand to 170, a gain of 4.6%. Market leaders Anglo American and De Beers Consolidated Mines enjoyed solid gains, with Anglo jumping 7.25 rand to 255.75 rand while De Beers rose 3 rand to 131.75. Fears of an imminent hike in official interest rates have eased, thanks to signs of recovery in the rand and falling yields at a weekly Reserve Bank Treasury bill auction. However, it was the Treasury bill tender that induced a collective sigh of relief from many in South Africa's financial markets. Interest rate anxiety has been a major factor plaguing sentiment in the equity market the past two weeks, with renewed softness in the rand and extremely tight money market conditions heightening anticipation that the central bank would be forced to act. Friday's solid rally could prove to be a turning point, traders said, and could anchor further gains by the broader market next week.
VastPress 2011 Vastopolis
