Weaker dollar sends miners on the JSE sharply higher

A weaker dollar buoyed mining stocks on the JSE at midday on Wednesday‚ sending the all share up more than 1%.

At 12pm‚ the all share had risen 1.56% to 52‚593.50 points and the blue-chip top 40 index was 1.55% higher.

Platinums and gold miners rallied 5.64% and 3.49% respectively. Resources added 3.79%. Banks rose 4.27% and financials gained 2.04%. Industrials were up 0.76%.

The dollar fell against major currencies following a speech by US Federal Reserve chairwoman Janet Yellen in which she said global economic and financial uncertainty justified a slower approach to rate increases in that economy.

Commodities as an asset class are vulnerable to dollar strength. Gold‚ oil and platinum‚ as well as scores of other raw materials and agricultural commodities‚ are denominated in dollars. When the dollar strengthens‚ each dollar can purchase more commodities‚ so prices fall. As a result of the falling prices at the hands of the strong greenback‚ the share prices of commodities producers also decline.

“When the most powerful woman in the world says that she thinks it is best to be cautious right now‚ given that the global outlook is uncertain‚ best we all listen‚” said Vestact analysts.

“Speaking at the riveting location of the Economic Club of New York yesterday‚ the Federal chair didn’t give any timing of the rates cycle movement ... it was interpreted as on hold for now‚” the analysts said.

Stock markets in Europe were also firmer at noon (CAT). The London FTSE 100 had risen 1.51%‚ the Paris CAC 40 1.61% and the German Dax 30 1.51%.

Among individual shares on the JSE‚ Anglo American (AGL) jumped 7.56% to R113.87. African Rainbow Minerals (ARM) soared 11.40% to R90.59.

Gold Fields (GFI) was 5.78% firmer at R58.92. Impala Platinum (IMP) rallied 7.71% to R46.10.

Wescoal (WSL) rocketed 20.16% to R1.55.

FirstRand Bank was up 5.46% to R46.91. Standard Bank (SBK) gained 4.35% to R132.29.

The Foschini Group (TFG) rose 3.09% to R138.51.

Lewis Group (LEW) was down 1.22% to R47.91.

Telkom (TKG) climbed 3.11% to R54.29.

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