Kumba sparks JSE rally as iron ore prices surge

26 April 2015 - 02:00 By Reuters

South African stocks hit record highs on Friday, driven by Kumba Iron Ore's performance on higher prices for the steel ingredient. The All Share index rose 0.92% to 55188 and the Top 40 index was up 1.15% to 48965.Both indices notched their biggest weekly jump in almost three months, gaining almost 3%.Kumba rose nearly 11% after spot iron ore surged as Chinese futures hit their upward daily limit, and posted a second weekly gain with mills in the world's top ore consumer stepping up buying.BHPBilliton rose 3.4% as iron ore entered a bull market. The world's biggest mining company said on Wednesday that it would miss its target of raising production to 290million tons a year by mid-2017."The three-day streak is definitely on iron ore," said Gary Booysen, head of trading at Vunani Private Clients. "It's the Kumba asset rallying that's dragging the rest of them up."Trade was fairly active, with nearly 210million shares changing hands.Emerging-market stocks headed for a fourth weekly gain, the longest stretch since January, as investors continued to bet that China will take further steps to boost growth .Brazil's Ibovespa approached a bull market amid speculation that spending cuts proposed by President Dilma Rousseff will be enough for the country to avoid a credit rating downgrade.Equities surged to a 15-year high in Taiwan. The rouble slipped as Russia's finance m inistry warned that the currency's world-beating rally was excessive.Stock gains this month have been led by optimism that China will step up stimulus to revive an economy growing at the slowest pace since 2009.While Shanghai's benchmark gauge dropped on Friday from a seven-year high, it posted a seventh weekly advance running. Investors are now turning their attention to the Federal Reserve's policy meeting next week to gauge the timing of any interest-rate increases."The rally is fully dependent on China and the Fed," said Martial Godet, head of emerging-market equities and derivatives strategy at BNP Paribas SA in Paris."The rest of emerging markets is less convincing, and currencies should still depreciate once US rates start to rise."The MSCI Emerging Markets Index added 0.9% to 982.93 in morning trade in New York on Friday, pushing its five-day gain to 1.7%. This gauge has jumped 11% in the past four weeks, and now trades at 12.7 times the projected earnings of its members, the highest since January 2010. ..

There’s never been a more important time to support independent media.

From World War 1 to present-day cosmopolitan South Africa and beyond, the Sunday Times has been a pillar in covering the stories that matter to you.

For just R80 you can become a premium member (digital access) and support a publication that has played an important political and social role in South Africa for over a century of Sundays. You can cancel anytime.

Already subscribed? Sign in below.



Questions or problems? Email helpdesk@timeslive.co.za or call 0860 52 52 00.