Commodities lead JSE higher

producer price index, due at 11.30am, to give the market further direction.
At 9.44am the JSE all share index was 0,68 percent stronger at 40 116,35 points, with platinum adding 1,61 percent after being the hardest hit on Monday due to labour trouble in the sector.

Banks added 1,41 percent, while the gold sector fell 0,93 percent. Barclays expected the PPI data should limit residual expectations of another rate cut.

“There were some suggestions yesterday from the Organisation for Economic Co-operation and Development that there is still scope for the Reserve Bank to loosen policy due to South Africa’s poor growth backdrop,” Barclays said.

“However, we believe the possibility of another rate cut remains remote due to mounting inflationary pressures, especially after the rand’s recent weakening.”

On the international front, Rand Merchant Bank noted that Chinese Premier Wen Jiabao had announced a broad plan to rebalance the economy towards consumption and away from investments and exports.
“This includes slowing down the property building boom. This is probably a net positive for South Africa.

A move to consumption would boost demand for platinum — through cars — but slow demand for base metals such as zinc and copper that are used in construction. Oil is up due to the news,” RMB said.

“US President Barack Obama and the Republicans are reportedly making some headway with talks over the budget. This reduces the risk of yet further fiscal contraction later this year as the politicians deal with one deadline after another,” RMB said.

On the JSE resource counters Exxaro gained 2,36 percent to R172,98 and ArcelorMittal SA was up 1,39 percent, trading at R30,70.

Platinum counter Aquarius jumped 8,89 percent to R8,45. Royal Bafokeng, however, gave back 1,12 percent to R53 after reporting yesterday morning a 37,8 percent decline in diluted headline earnings per share from 166c to 104c per share for the year ended December 2012.

Financial services group FirstRand added 0,94 percent to R31,12 after announcing a 25 percent increase in normalised earnings to R7,218 billion for the six months ending December 31 2012‚ producing a normalised return on equity of 21,9 percent from 19,5 percent the previous year. – AFP.