THE JSE opened higher on Thursday, with the platinum, gold mining and resources indices leading the upside, as risk appetite returned to the market after the US Federal Reserve’s minutes on Wednesday night suggested a third round of quantitative easing (QE3) would be seen in September.
At 9.44am local time the all share index was up 0.51% at 35,798.21 points, with the platinum index 1.55% higher, the gold mining index 1.23% stronger and resources up 1.21%.
At 9.42am local time the platinum price had extended its previous gains, trading 1.63% higher at R1,556/oz, on a weaker dollar and the woes at South African platinum mines. The gold price also showed gains, trading 0.75% stronger at R1,664.95/oz.
"Risk appetite is back in the market after (US Fed chairman) Ben Bernanke’s comments that they are still looking at further stimulus that is ‘coming fairly soon’," said Hennie Fourie, a stockbroker at PSG Konsult in Pretoria.
"These comments are pushing the markets higher. When there is risk appetite, the price of resources counters increases.
"The dollar weakened, supporting the platinum and gold prices, and it is also supporting our commodity shares. Platinum counters are the best performers this morning with some bargain hunting seen in this sector," he said.
Asian markets were trading higher, with the Hang Seng index last up 1.19% and the Nikkei closing 0.51% higher. Global markets should continue to react to the Fed minutes today, while European purchasing managers index (PMI) figures due on Thursday morning were also expected to have an influence.
The FTSE 100 was 0.44% higher.
In its morning note, Rand Merchant Bank flagged the drop in the flash HSBC Chinese PMI figure to a nine-month low of 47.8.
"The economy was not managing to pick up any speed. No wonder an Australian minister declared the end of the resource boom. If there is some compensation, People’s Bank of China governor Zhou Xiaochuan has hinted that we will be seeing further monetary easing," the RMB said.
"Headlines around the world scream that unrest has spread to other mines in South Africa. There is some compensation at least: combine the strikes, the Fed minutes and the hope of European Central Bank action next month and precious metal prices are soaring," it said.
Among local platinum counters, Northam Platinum was up 77c, or 3.02%, at R26.27; Lonmin added R1.45, or 1.82%, to R81.25; Impala Platinum gained R2.00, or 1.48%, to R137.06; and Amplats added R6.00, or 1.4%, to R435.00.
In other resources counters, diversified miner BHP Billiton gained R3.15, or 1.24%, and Kumba Iron Ore was up R9.50, or 1.72%, at R562.