Resources give JSE New Year fillip

[] — THE JSE continued trade in the black at noon on Tuesday as stronger commodity prices drove the resource sector to lead the gains.

A local trader said that base metal prices were looking good and resources were lifting on the back of the rise. He stressed that trade was still on the thin side at the moment.

At noon local time, the JSE All Share index was up 2.25%, as resources led the gains up 3.45% and gold stocks followed suit, lifting 3.11%. Platinums took up 0.90%.

Banks collected 2.05%, financials added 1.73% and industrials acquired 1.57%.

The rand was bid at 8.06 to the dollar from 8.10 at the JSE’s close on Friday. Gold traded at $1 590.41 a troy ounce from $1 562.47 at the JSE’s previous close, while platinum was quoted at $1 413/oz, from $1 377.70/oz at the previous close.

Dow Jones Newswires reported that European stocks were mostly higher on Tuesday, supported by strength in the basic resources sector, with the London market significantly outperforming as it played catch-up to its European counterparts.

Paris’ CAC-40 had succumbed to some profit-taking and was down 0.26% at noon local time. London’s FTSE 100, which was closed on Monday for bank holiday, fared the best. The index was up 1.29% at noon local time.

The overall tone may have been positive, but market participants remained sceptical about whether this year would be any better than the last, which was marred by the eurozone debt crisis.

This week, the focus is likely to shift back to fundamentals and investors will watch closely for a slew of data out of the US, culminating in Friday’s nonfarm payrolls release.

In Asia, stock markets closed up on Tuesday as signs of a pick-up in China’s manufacturing activity boosted sentiment across the region, with resource stocks outperforming in Hong Kong and Sydney, while exporters led the Seoul market sharply higher.

Investors were encouraged by China’s official purchasing managers’ index, which rose to 50.3 in December, representing a return to expansionary territory after dipping below 50 in November, data released on Sunday showed.

Hong Kong’s Hang Seng Index added 2.4%. Markets in Japan and China were shut for holidays.