JSE powers through 86 000 points

China’s stimulus boosts markets globally.

The JSE – Africa’s largest stock exchange – surged to a new high on Wednesday morning, powering through the 86000 points mark.

All sectors on the bourse were trading in the green and the JSE All Share Index (Alsi) was up over 1.5% by 9.30am, around 86 060 points.

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The stimulus package by China’s central bank, which this week lowered bank reserve requirements and pushed down the market benchmark interest rate to spur growth and lending activity, has boosted markets globally, with the JSE surging on Wednesday after being closed for the Heritage Day public holiday on Tuesday.

Listen: Can quantitative easing help boost China’s growth

Resources (up 2.5%), Industrials (up 1.6%) and the Top 40 Index (up almost 1.5%) drove the JSE’s overall gains.

However, the local market has also benefited from increasing positivity following the start of the interest rate cutting cycle, optimism around SA’s new Government of National Unity (GNU), and no power cuts by Eskom for a sixth straight month.

The JSE Alsi was back below 86 000 points before 10am, but still firmer by more than 1.3%.

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Commenting on the bullish JSE, independent analyst Jimmy Moyaha said despite the local market being closed yesterday, the Top 40 traded up circa 2% up on the news of fresh stimulus measures from China.

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“The China stimulus included lending rate cuts, reserve ratio cuts and property sector support… The move was particularly interesting because it created new highs on the local bourse,” he added.

“When local markets opened this morning, it was clear that mining stocks benefited most from the boost in sentiment, with the Resources Index trading 2.5% up within the first hour of trading,” Moyaha said.

“This is likely due to the anticipation that Chinese demand will improve and may start to filter through into global optimism. As the largest consumption economy for South African commodities, China has been touted by the World Bank and IMF to be pivotal to global growth for 2024/25,” he noted.

“There could have also been as a boost to sentiment as a result of the presence of President Cyril Ramaphosa in the United States, with the president making an appearance at the NYSE and ringing the closing bell on Monday,” added Moyaha.

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