THE JSE closed at a record high for the year on Wednesday as positive global sentiment and a higher oil price supported broad-based gains, bar gold shares.
Analysts said risk appetite returned to global stock markets, with US and Asian markets sharply higher in earlier trade. European markets were flat to mixed.
The firmer moves were underpinned by China’s announcing it would cut the reserve-requirement ratio for banks, despite the country’s facing a downgrade announcement from ratings agency Moody’s. Markets also anticipated further stimulus measures from the European Central Bank (ECB) and the Bank of Japan.
At 5pm the all share had closed 1.3% higher at 50,966.90 points and the blue-chip top 40 index had risen 1.45%.
Platinums rose 4.06% and banks ended the day 2.31% up. Resources rose 2% and industrials were 1.27% firmer. The gold index shed 4.98%.
The Dow Jones industrial average opened 0.26% weaker at the JSE’s close. The FTSE 100 was 0.34% lower but the DAX was up 0.22%.
Barclays Research said risk assets rallied as growth fears faded on the day. Industrial metals jumped 1% on average led by copper, while Brent crude, after recently hitting a two-month high, was steady at $36.58 a barrel in late afternoon trade.
Markets were further supported by the US Automatic Data Processing employment report for February, which indicated private-sector employment growth of 214,000. This was above the consensus estimate of 190,000 jobs.
Sentiment in the local market was supported by views that a possible downgrade by ratings agencies later in the year could be less detrimental to the SA economy than previously thought.
"It would be unlikely to have a major impact on the real economy or local financial markets," Capital Economics analyst William Jackson said.
Worry about a downgrade to junk hinges on the fact that some funds would no longer be able to hold South African debt. That could cause bond yields to jump and interest rates to rise.
"However, a ratings downgrade already seems to be priced into financial markets," Mr Jackson said, noting that SA’s debt ratio was on an upward trajectory but was unlikely to reach alarming levels any time soon.
Among individual shares on the JSE, Sasol’s share price had risen 3.40% to R450 by the close. Industrial conglomerate Bidvest was 3.31% lower at R354.59.
Among gold shares Gold Fields tumbled 7.65% to R61, Harmony fell 4.58% to R51.05 and Sibanye slipped 5.25% to R53.80.
Lonmin rallied 7.20% to R21.19.
Among banks, Nedbank rose 1.91% to R189.41. It reported that diluted headline earnings per share for the year to December 31 2015 rose 8.5% to R22.42 compared with the year-earlier period.
Barclays Africa was up 4.33% to R144.90, and Capitec climbed 3.18% to R515.88.
Retail stock Massmart Holdings rose 3.69% to R117.18.
MTN Group was down 1.16% to R135.75.