Stocks closed strongly on Thursday, ending up 1.7 percent after a weak start but moved into positive territory just before the South African bourse closed. Higher commodities prices were also aiding the positive trend on the JSE, with strong performances from resources and mining stocks.

Earlier the JSE had taken heart from news that two of Europe's largest economies, Germany and France, produced unexpected growth, which led to positive global sentiment in the markets.

Following on from a Federal Reserve announcement yesterday that the recession-hit US economy was stabilising, official statistics indicated that Germany and France both posted growth of 0.3 percent in the second quarter of the year.

By the close, the JSE all share had gained 421 points, or 1.71 percent, with gold counters 4.27 percent higher, resources 3.19 percent better and platinum counters up 3.24 percent.

Industrial stocks picked up 0.45 percent, while financials increased 0.96 percent and banks swelled 0.53 percent.

The rand was bid at 8.02 to the dollar, from 8.06 when the JSE closed on Wednesday. Gold was quoted at $955.85 a troy ounce from $947.90/oz at the JSE's last close, and platinum was at $1268.50/oz, from $1238/oz at its previous close.

Dow Jones Newswires reported that after Wednesday's 120-point surge, the Dow Jones Industrial Average headed lower in early trade as a round of downbeat economic data cooled the previous session's investor euphoria.

The Commerce Department said retail sales fell 0.1 percent in July despite the debut of the government's "cash for clunkers" programme meant to jump-start auto sales. Demand for goods aside from cars took a large tumble, with steep declines for housing-related retailers and electronic stores.

In other reports out on Thursday, initial jobless claims rose marginally last week and import prices fell in July on lower energy prices.

However, the Dow then inched into positive territory on the back of strong materials stocks and shortly before the JSE closed the Dow was up 25 points.

The London FTSE100 was up 50 points, or just over 1 percent.

A local trader said overall the JSE had started strongly and after a brief pullback when the Dow was in weaker territory, it had maintained that strength for most of the day.

The trader added that strong metals prices had been a feature, which had prompted across the board strength in the resources sector.

"Tongaat was a stand out, but most of the strength was in resources and mining stocks," the trader said.

She added that the surprise announcement by the Reserve Bank that it was cutting the repo rate by 50 basis point to seven percent had helped the banks to close stronger. The cut was then matched, with the major lenders announcing decreases in their lending rates.

Standard Bank, which pulled back into negative territory just before the close, was the exception.

South Africa's repo rate had been expected to remain unchanged, according to nine leading economists surveyed by I-Net Bridge. Only two economists in the poll felt that a cut of 50 basis points was in store.

"It was also a big volume day. Tongaat helped that, but generally we are starting to see volumes pick up a bit," she added.

Anglo American earlier on Thursday announced the successful exit from its Tongaat Hulett shareholding, realising gross proceeds of about 4.2 billion rand. The sale was completed by way of an accelerated bookbuild of 51.2 million Tongaat Hulett ordinary shares, representing a 49.5 percent stake, placed with qualifying institutional investors at a price of 82 rand a share.

Peter Staude, CEO of Tongaat Hulett said the bookbuild process highlighted interest by institutional fund managers, with Tongaat Hulett shares now widely held both locally and internationally. The counter closed up 4.7 percent at 89 rand.

Among resources, BHP Billiton picked up 3.24 percent at 214 rand and Anglo American added 3.62 percent to 257.50 rand.

Petrochemicals group Sasol advanced 1.09 percent to 283.05 rand.

Among the miners, AngloGold Ashanti profited 4.38 percent to 304.26 rand and Gold Fields picked up 4.63 to 101.75 rand. Harmony saw a gain of 3.39 percent to 76.50 rand.

Angloplat advanced 3.09 percent to 701 rand, while Impala Platinum profited 3.16 percent to 210.97 rand and Lonmin picked up 4.34 percent to 198.25 rand.

Northam Platinum rose 5.44 percent to 39.75 rand.

Metals group ArcelorMittal rose 1.86 percent to 118.15 rand, with Kumba Iron Ore picking up 2 rand to 237 rand, while diversified miner Exxaro lifted 2.99 percent higher to 87.55 rand and Highveld Steel increased 6.97 percent to 76 rand.

Exxaro said its headline earnings per share for the six months ended June 2009 are expected to be between 400 cents and 410 cents, representing an increase of between six percent and nine percent when compared with the corresponding period in 2008.

Among industrials, British American Tobacco added 95 cents to 252.70 rand, with Imperial profiting 3.92 percent to 70 rand. Imperial Group said headline earnings per share from continuing operations for the year to 30 June 2009 are expected to be between 10 percent and 15 percent higher than the previous year. The group expects HEPS to be in a range of 675 to 710 cents, compared to 615 cents last year.

SABMiller jumped 1.92 percent to 180.90 rand.

Among the banks, the country's largest banking group in terms of assets, Standard Bank on Thursday reported a 33 percent decline in headline earnings per share to 352.5 cents for the six months ended June on an International Financial Reporting Standards (IFRS) basis.

Normalised headline earnings per share reflected a 27 percent decline to 351.3 cents.

The group declared an interim dividend of 141 cents per share versus 193cents for the previous comparable half-year.

The counter closed 19 cents down at 95.51 rand.

However, Nedbank was up 1.77 percent to 109.30 rand and Absa collected 3.46 percent to 126 rand.

On the telecoms front, Telkom lifted 50 cents to 40.50 rand, but MTN Group shed 50 cents to 130 rand, while rival Vodacom added 49 cents to 55.35 rand.