JSE up on bargain hunting

The JSE opened nearly 300 points in the black on Thursday as a three day advance in US stocks led to bargain hunting, while safe haven assets like gold were placed on the defensive.

Traders do expect volatility to persist ahead and around the key Jackson Hole symposium on Friday.

By 09:15 local time, the JSE all-share index was up 0.97%, though the gold index was down -0.39%. But platinum counters gained 1.17% - the highest performers so far. Industrials moved up by 0.78%, while banks made 0.32% and financials 0.33%. the resources index was up 1.6%.

The rand was bid at 7.24 to the dollar, from 7.22 at the JSE's close on Wednesday. Gold was trading at US$1,741.81 a troy ounce from US$1,781.71 at the JSE's previous close, while platinum was at US$1,806.50/oz, from US$1,835.50/oz previously.

“Money is being taken out of gold, but we expect a rally on the back of the Fed deciding to assist in adding a bit of liquidity. Until that decision comes, we will see this type of sentiment,” said an equity derivatives dealer from Global Trader.

Friday's widely anticipated speech by U.S. Federal Reserve Chairman Ben Bernanke at the Jackson Hole central bankers' symposium will potentially discuss further measures to aid stuttering markets and economies.

Dow Jones Newswires reported that the Australian share market enjoyed broad-based gains Thursday as stronger offshore markets and generally better-than-expected domestic earnings reports gave a much-needed boost to investor confidence.

However, the mood remained a little cautious before Friday's discussion, according to some analysts. The benchmark S&P/ASX 200 closed up 1.1% at 4212.8 on solid share trading volume, after hitting an intraday high of 4233.4, then retreating to 4193.5. The index was consolidating after hitting a four-day high of 4238.6 Wednesday.

Asian shares were higher Thursday as improved sentiment kept safe-haven assets such as the yen and gold on the defensive, while the resignation of Apple's iconic Chief Executive Steve Jobs had a mixed impact on regional tech stocks.

“The three-day advance in U.S. stocks is prompting bargain-hunting and short-covering, but overall sentiment still leans towards pessimism and trading will likely continue to be volatile going into next week,” said Kazuhiro Takahashi, general manager of investment strategy and research at Daiwa Securities in Japan.

Japan's Nikkei Stock Average climbed 2.3%, Australia's S&P/ASX 200 added 1.0%, South Korea's Kospi Composite tacked on 0.9%, the Shanghai Composite Index was up 1.7%, Hong Kong's Hang Seng Index rose 1.6%, while India's Sensex was flat.

Dow Jones Industrial Average futures were down 23 points in screen trade. The Dow was up a healthy 1.29%, or 144 points,

In London the FTSE100 was up 0.8% after the open.

It was a busy morning on the reporting front in SA, with wholesaler and retailer Massmart (MSM) - which is being bought by giant Walmart - on Thursday reported a 24.9% decrease in diluted headline earnings per share to 407.7 cents for the 52 weeks ended June 27 2011 from 542.7 cents a year ago, including Wal-Mart transaction costs.

The group declared a dividend of 386 cents per share, unchanged from last year.

The I-Net Bridge consensus forecast was for diluted HEPS of 567 cents and a dividend of 386 cents per share.

Its share price managed to gain 42 cents in the first 15 minutes of trading to 151.41 rand despite the bad result.

Sticking with retail, but proffering an improved picture was Woolworths (WHL) with adjusted diluted headline earnings per share of 209.8 cents for the year ended June 2011, up from 152.2 cents in 2010.

A final dividend of 93 cents per share was declared and a total distribution of 143.5 cents per ordinary share was made for the period, an increase of 36.7%.

The I-Net Bridge consensus forecast was for diluted HEPS of 192 cents and a total dividend per share of 131.50 cents. Its share price shot up by 1.25 rand, or 3.89%, to 33.35 rand.

Impala Platinum (Implats, IMP), the world's second largest platinum producer, on Thursday reported a 41% increase in its full year headline earnings per share on the back of improved production and higher platinum prices.

Headline earnings for the year to end June 2011 were 11.05 rand a share, compared to 7.86 rand previously with the biggest contributor to the increase in earnings was higher dollar metal prices.

Prices for platinum climbed throughout the year from just over US$1,500 per ounce to end at about US$1,800 per ounce. Impala collected 1.60 rand to 171.50 rand in early action.

Optimum Coal (OPT), the South African coal mining and exploration group, on Thursday reported full year headline earnings of 203.82 cents - a massive improvement on last year's 28.92 cents.

Profit more than doubled to 459.6 million rand in the year to end June 2011 from 229.7 million rand a year ago. However, its share price lost 26 cents to 29.24 rand.

Of the heavyweight stocks, Anglo American (AGL) was up a healthy 6.51 rand, or 2.40%, to 277.30 rand after the opening bell, with BHP Billiton (BIL) hot on its heels with a gain of 5.01 rand, or 2.19%, to 233.35 rand. Sasol (SOL) added 3.25 rand, or 1.05%, to 313.26 rand.

Coal miner Exxaro (EXX) stood out from the crowd with a 4.01 rand, or 2.43%, improvement to 169.01 rand, as did Aquarius Platinum (AQP) with a move up of 1.41 rand, or 5.02%, to 29.49 rand. Heavyweight Amplats (AMS) sailed ahead with a 6.29 rand, or 1.12%, gain to 570.30 rand.

The major gold miners were all down, with Anglogold Ashanti (ANG) off by eight cents to 311.93 rand, while both Harmony and Gold Fields were down by close to a percent each. Kumba Iron Ore (KIO), however, managed to add 7.77 rand, or 1.76%, to 448.77 rand.

Of the industrials, British American Tobacco (BTI) collected 1.97 rand to 324.30 rand, while SAB Miller (SAB) was up by 1.36 rand to 254.22 rand.

Of telecom counters, MTN added 88 cents to 138.13 rand.

Among banks, Investec (INL) stood out with a gain of 84 cents, or 1.78%, to 48.13 rand.

Pharmaceutical company Cipla Medpro (CMP) on Thursday reported diluted headline earnings per share of 42.2 cents for the six months ended June 2011 from 24.4 cents a year ago.

An interim dividend of 6.5 cents per share was declared, up from 5.0 cents a year ago. Its share gained 13 cents, or 2.07%, to 6.40 rand. - I-Net Bridge