JSE makes a healthy comeback

Tamlyn Stewart

Tamlyn Stewart

The JSE staged a recovery after Monday's heavy sell-off to close 2,59percent higher at 21022 points, led by resources, which rose 3,26percent, and a recovery on international markets.

Traders described yesterday's gains as "quite a good recovery" but warned of continuing volatility.

"There is a lot of uncertainty. People are waiting to see how the bailout package is going to flow into the market, and there are still liquidity problems," said one trader.

The gold price rose more than two percent to $876,60 (about R7764) a troy ounce as investors looked for a safe haven for their money.

Brent crude oil was trading at just over $86 a barrel when the local bourse closed yesterday, up from Monday's levels of around $83 a barrel.

"Slowing growth and slowing demand in the States is leaving oil under pressure - that's about the only good thing that's happening," one trader said.

He said although the market was very oversold at the moment, investors were not prepared to jump back into the market just yet.

The rand was trading at around R8,84 to the US dollar, R15,49 to the British pound and R12,03 to the Euro late yesterday, as investors continued to shy away from emerging markets.

News that the US Federal Reserve would intervene in the commercial paper market to try and unfreeze lending, saw US markets rally soon after opening, but they slipped back into the red a few hours later as some financial stocks remained under pressure.