JOHANNESBURG - Resources stocks yesterday took advantage of the weaker rand and drove the JSE higher.
The all share index closed the trading session 0.32 percent higher at 57 885 points, while the blue chip Top40 index inched up 0.47 percent to 51 821 points.
Anglo American rose 3.43 percent to R307.50, with BHP Billiton gaining 2.03 percent to R309.69. Kumba Iron Ore moved 2.82 percent higher to R298.02 and Exxaro was flat, down just 0.12 percent to R142.
Dave Mohr, the chief investment strategist at Old Mutual Multi-Managers, said a weaker rand tended to be good for the economy and certainly benefits most investment portfolios.
“It seems ironic that the resources sector is the best performing sector on the JSE, but this is due to the dual-listed heavyweights Anglo American and BHP Billiton,” Mohr said.
“These companies have substantially reduced exposure to South Africa over the years. This is yet another example of how the JSE no longer represents the local economy.” The weak currency, however, took the shine off banking stocks with the banks index shedding 1.54 percent on the day.
South Africa’s biggest bank by market capitalisation, FirstRand, led the decline losing 3.52 percent to R63.05, while Capitec shed 1.28 percent to R925.01, and Absa was 1.30 percent weaker at R160.25. The biggest bank by assets, Standard Bank, lost 0.77 percent to R186.60 and Rand Merchant Bank was 1 percent weaker at R76.19. The only bright spark in the banking sector was Nedbank which firmed 0.82 percent to R258.95.
Gold mining stocks, which usually bask in the weaker rand, closed the day on the back foot as subdued platinum and gold prices weighed down mining stocks.
The gold mining index shed 0.19percent on a day marked by market volatility.