JSE opens higher as hawkish Fed concerns fade

The JSE opened higher on Tuesday as concern about imminent US rate hikes eased‚ boosting property and banking stocks.

The Dow Jones closed 0.58% firmer on Monday‚ mainly on financials. Asian markets were mixed on Tuesday morning with the Nikkei shedding 0.07%. The Hang Seng added 0.93%.

At 9.30am‚ the all share was 0.35% higher at 53‚749.60 points and the blue-chip top 40 added 0.37%. Property stocks led the charge‚ gaining 0.87%. Banks lifted 0.73% and financials rose 0.70%. The gold index shed 0.85% and platinums dropped 0.73%.

Markets initially interpreted US Federal Reserve chairwoman Janet Yellen’s Jackson Hole speech on Friday as hawkish‚ in line with previous comments from Fed members. But further analysis has resulted in a more dovish assessment.

Momentum SP Reid analysts said in an early morning note that the slightly more assertive rate response from Yellen‚ and later from vice-chairman Stanley Fischer‚ had led markets to become increasingly convinced that despite hawkish rhetoric‚ the Federal open market committee would opt for a slightly more measured and gradual approach.

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The focus had shifted to economic data set to be released later in the week‚ notably nonfarm payrolls in the US on Friday‚ after Yellen said any further rate hikes would be data dependant.

A better-than-expected number on Friday would boost the chances of a US rate hike in September. The market is expecting that 185‚000 jobs were created in August‚ a low figure considering 255‚000 were created in July.

Among property stocks‚ New Europe Investments rose 1.67% to R167.89. Growthpoint recovered 1.14% to R25.79.

Texton was 1.91% higher at R8. It reported on Monday annual distributions rose 9.4% for the year to end June.

Barclays Africa led the gains among banks‚ firming 1.17% to R155.35. Standard Bank lifted 0.87% to R139.16.

Among gold stocks‚ Gold Fields shed 2.01% to R79.81.

Bidvest was 1.24% up at R155. It reported on Monday that annual headline earnings per share (HEPS) to end June rose a sluggish 2.5%.

Old Mutual was 0.85% higher at R36.92.

- TMG Digital/BDlive