Sentiment boosts S.African assets in thin trade

Mon Aug 29, 2011 4:49pm GMT
 

By Xola Potelwa

JOHANNESBURG (Reuters) - South African stocks went into orbit on Monday, tracking stronger global equity and commodity prices, and rising over 3 percent, the highest intra-day rise in nearly three weeks.

The rand also advanced to a three-week high, gaining on a defensive dollar as risky assets enjoyed positive investor sentiment after the Federal Reserve left open the possibility of further monetary stimulus in the United States.

Market moves were exaggerated by thin trading conditions while the British market was closed for a national holiday.

Volume in the currency market was at its lowest in a week according to Reuters data, and dealers said volume was half of what it normally is on an average day.

Government bonds were supported by the firmer rand but had an uneventful session with the UK market out of play. Dealers are waiting for domestic second quarter gross domestic product data on Tuesday to give pointers on likely issuance changes.

The JSE's blue-chip Top-40 index powered 3.24 percent to 27,049.24 in thin trade and the broader All-Share index climbed 2.95 percent to 30,292.76, led by banks and resource firms.

"The volumes are thin due to the FTSE bank holiday but leading on the back of the strong Dow on Friday and the strong Futures, we are seeing our market being very strong today," said Desmond Reilly, a trader at PSG Securities.

The banks' index gained more than 4 percent, with Standard Bank, Africa's biggest lender by assets, climbing 4.6 percent to 98.83 rand.   Continued...

A South African child holds a 50 rand note July 2. JN/FMS

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