South Africa’s benchmark stocks gauge surged to a record as gold- and platinum-mining stocks jumped on higher prices for the metals following the Federal Reserve’s surprise decision not to pare back stimulus.
The FTSE/JSE Africa All-Share Index (JALSH) rose as much as 2.3 percent, the most since January 2012 on an intraday basis, and traded 2.2 percent higher at 44,318.34 by 3:02 p.m. in Johannesburg. The gold-mining gauge rallied 8.6 percent, the most in more than a month, and platinum stocks advanced 6 percent to the highest since Feb. 26.
Commodity prices jumped after the Fed unexpectedly left its monthly asset purchases unchanged yesterday at $85 billion, while analysts projected a $5 billion tapering of stimulus. The spot price of gold added 4.3 percent to $1,366.68 per ounce since yesterday, the biggest two-day gain since July 22. Platinum increased 3.4 percent in the period, the most in almost six weeks.
“There is a broad-based rally going on as markets cheer the surprise lack of tapering to the Federal Open Market Committee’s accommodative stance,” Ryan Wibberley, head of equity dealing for frontier and emerging markets at Investec Asset Management, said by phone from Cape Town. “More stimulus is good for asset prices, including metal prices.”
AngloGold Ashanti Ltd. (ANG), Africa’s largest producer of the metal, increased 12 percent, the most since Aug. 12, to 139.56 rand. The stock is the best performer on the 165-member all-share index today. Harmony Gold Mining Co. (HAR) gained 8 percent to 38.03 rand, halting four days of declines.
South Africa has the world’s largest-known reserves of platinum and chrome and is the sixth-biggest producer of gold.
“The Fed’s decision to wait for more evidence of recovery before tweaking quantitative easing stokes risk appetite,” Wibberley said. “This means dollar weakness, gains for emerging-market assets, gains for global share prices and gains for commodity prices.”
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