SOUTH African stocks rose the highest in two weeks yesterday, buoyed by gains in mining stocks amid higher commodity prices.
The JSE All Share Index broke above the 76 000 points mark early yesterday, the first time since January 20, advancing 0.76 percent to 76 234 index points by lunchtime. The index later closed up 0.54 percent at 76 090.52 points
The resources index lifted 1.76 percent to 78 277 points in intraday trade, while the precious metals and mining index was 1.78 percent higher to 58 848 points.
Mining and metals company South32 closed the day 4.59 percent higher at R49.21 per share, AngloGold Ashanti was 3.49 percent higher to R304.14 per share, while Sibanye-Stillwater closed at R58.78, 1.61 percent higher.
Gold prices held its advance to around $1 820 (R28 168) an ounce as growing concerns over broadening price pressures drove investors to hedge with the metal.
PSG Wealth portfolio manager Schalk Louw said the general demand for commodities was expected to remain high throughout 2022. “If you’ve thought the commodity run has moved beyond its peak, think again,” Louw said. “Most investment firms believe the general demand for commodities should remain high in 2022 – of course, something that will benefit a country like South Africa and a currency like the rand.”
In their 2022 outlook, JP Morgan said commodities were set for a strong year ahead despite a late-November setback.
“Although not all the investment houses are convinced that precious metals are set to deliver a scintillating performance in 2022, there is consensus that oil is the commodity offering the best value,” Louw said.
Meanwhile, oil prices eased from seven-year highs yesterday as investors turned their attention to the resumption of indirect nuclear talks between Iran and the US. The price of Brent crude was just above $91 per barrel yesterday as friendly gestures by the US and Iran sparked some optimism that the two sides were inching toward reviving a nuclear deal. The deal could lead to a resumption of official crude exports from the Persian Gulf producer.
ActivTrades senior analyst Ricardo Evangelista said the revival of indirect talks between the US and Iran could lead – in a best case scenario – to the reopening of international markets to Iranian oil.
“Oil price sentiment has been dominated by the imbalance between supply and demand, and in such a tight market, the mere possibility – albeit not a very clear-cut one – of increased supply was sufficient to take some of the pressure off the price of the barrel,” he said.
BUSINESS REPORT ONLINE