The JSE all share rebounded strongly on Thursday ahead of the festive season in volatile trade as the European Central Bank (ECB) announced further stimulus measures to boost growth in the eurozone.

The rand lost nearly 3% against the dollar at one point as the market interpreted the ECB’s decision to extend the stimulus programme to December 2017 as a hawkish step as the monthly amount was cut to €60bn from €80bn. It later recovered to R13.6763/$ in early evening trade.

Analysts described the reduced monthly asset buying as risky, similar to the US Federal Reserve’s decision in mid-2013 to cut back its quantitative-easing programme, which led to the "taper" tantrum and a sell-off of bonds.

But the weaker rand boosted the all share, with the index jumping 2.16% to 50,543.40 at the close, the best percentage gain since September 22.

The all share recorded broad-based gains, led by retailers, resources and banks, with gold shares softening. Listed property stocks were under pressure after local bonds showed little movement as US treasuries weakened.

Industrial stocks also firmed with rand hedges ending higher after being heavily sold over the past few months. The retraction seemingly created renewed ground for a recovery.

"For the first time in seven years, we are witnessing value stocks pulling ahead of growth stocks," said Cannon Asset Management investment officer Andrew Dittberner.

He said investors who have betted on value stocks will have experienced outperformance over the past year. It not only relates to resources, which have been the firm favourite so far in 2016, but also to selected financial and industrial counters, he said.

That means some of the previously high-flying rand hedges are offering value to investors again.

British American Tobacco is 14% off for the year so far, but its price to earnings ratio (p:e) has rerated to 17, making it cheaper than the all-share average of 22. Similarly, global luxury goods group Richemont came off the boil from a high p:e of greater than 30 earlier to only 18, before rising again to 28 where it is trading now.

Banks continue to offer obvious value, with FirstRand trading at a p:e of 13, but up 13% in 2016. Standard Bank has risen 32%, but is still rated by the market at a low p:e of 10.3.

The all share was still 0.3% lower for the year, but is consistently improving in December, which is usually a good month for the bourse. That could result in a firmer close for 2016 after the bourse sagged in the third quarter.

Property stocks were the exception on Thursday, with the property index closing 0.70% down in mixed trade as global bonds were sold off following the ECB stimulus extension announcement.

There is usually a high correlation between bonds and the property index. Liberty Two Degrees rose 2.86% to R10.80, but Rockcastle closed 2.61% lower at R33.89. Hyprop was 0.52% off at R112.70.

New Europe Property Investments was 1.49% lower at R147.76, but Capital & Counties rose 2.37% to R51.36. The property index is down 1.53% for the year so far.

Stanlib retail investment director Paul Hansen said the all share usually followed the US S&P 500 index, which has risen 9.6% so far in 2016.

"The weaker JSE and stronger S&P 500 was unusual and could have related to money pouring out of emerging markets into the US following Donald Trump’s victory, as well as nervousness about the S&P rating," Hansen said.

Resources gained on the day, despite lower gold and platinum prices. Analysts said the market was following higher oil prices, with Brent crude gaining 1.15% to $53.62 a barrel in early evening trade.

Old Mutual Multi-Managers chief investment strategist Dave Mohr said 2015’s deflation scare on lower oil prices was now a thing of the past. "The challenge was now for oil cartel Opec to get its members to stick to their lower production quotas," he said, amid indications that Russia was having second thoughts about sticking to the production-cut agreement.

Higher iron-ore prices have also been a boon for sentiment among resources. The price has risen to $80 a tonne, the highest level in two years, supporting the big miners, such as Anglo American, rocketing more than 200% so far in 2015.

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