South African JSE powers past 23,000 mark as investors take heart
The JSE has powered through the 23,000 mark for the first time, closing at a record high as investors reacted to rising gold prices and a measured hike in interest rates.
Improved sentiment towards emerging markets and stronger world markets in general also helped the surge on the JSE, where the all share index reached 23,148, before closing at 23141 - 1,32% higher than the previous 22,840.
The Reserve Bank governor, Tito Mboweni's assurances that the rate-setting monetary policy committee is seeking a soft landing for the economy as it tames inflation will have allayed fears of an aggressive tightening of monetary policy which could harm SA's growth prospects.
However, banks and retailers stole the limelight as investors climbed in after the previous 50 basis point rate hike, which was less severe than the 100 basis points expected by some in the market. The banks index also rose by 3,1%, while the general retailers index rose 2,65%, with Edcon the highest climber, up 4,47%.
A recovery in the rand exchange rate since a recent three-year low of R7,98 to the dollar took the shine off gold stocks, which otherwise would have benefited as the gold price rose towards $600/oz. Dealers said that the rand had taken a breather after sharp gains in a rally that gathered momentum after the rate hike. But gold's rise continued to be linked to its safehaven status in the light of North Korea's nuclear test. It has risen 2,5% since then.