The JSE closed firmly in the black on Monday boosted by a decision from Swiss bank UBS, to raise its recommendation on South African equities to 'overweight' from 'neutral'.

The JSE all share index finished 1.98 percent firmer, with resources 1.31 percent better off, and platinum miners 4.64 percent higher. Gold miners added 0.68 percent.

Banks added 3.25 percent, financials gained 2.23 percent, and industrials were 2.52 percent stronger.

The rand was bid at 7.83 to the dollar from 7.86 at the JSE's close on Friday. Gold was quoted at $1187.72/oz a troy ounce from $1178.03/oz at the JSE's last close. Platinum was at $1,529/oz from $1497.50/oz at the JSE's last close.

A local equities trader said: "Strength on the JSE today is on the back of an upgrade by UBS on South African equities to 'overweight' from 'neutral'. The bank forecast a solid recovery for South Africa in the global economy. We have seen a lot of short covering as a result.

"In general, emerging markets are currently offering better returns," he added.

Dow Jones newswires reports that Financials led US stocks lower on Monday as a Spanish bank bailout spurred concerns over the health of European banks and questions lingered over the final shape of the US financial regulatory overhaul.

After dipping into a brief triple-digit decline, the Dow Jones Industrial Average recently slipped 48 points, or 0.5 percent, to 10148, in choppy trading.

Financial components slid into the red as the Spanish bank bailout focused attention on the health of other European banks. J.P. Morgan Chase declined 1.1 percent, while Bank of America shed 1 percent. Morgan Stanley, not a Dow component, fell 1.8 percent.

Investors said the US Senate's approval of a financial legislative overhaul last week still leaves many questions unanswered as lawmakers work to resolve differences between the Senate and House versions of the bill, leaving the bill's final shape still nebulous.

"We're going to be in a quiet period for a while. We won't hear a lot from Capitol Hill," said Burt White, chief investment officer at LPL Financial. However, he said concerns over the Spanish bailout were likely overblown, as the Federal Insurance Deposit Corp. in the US routinely bails out failed banks.

Investors' avoidance of risk was in evidence. The US dollar rose against a weakening euro and demand climbed for safer US Treasurys. The price of the 10-year note climbed to push yield down to 3.21 percent. The U.S. Dollar Index, which tracks the US currency against a basket of six others, jumped 1.2 percent.

US economic data showed a better-than-expected rise in April existing- home sales. Home resales increased by 7.6 percent, to a 5.77 million annual rate from a revised 5.36 million in March, the National Association of Realtors said Monday. Economists surveyed by Dow Jones Newswires expected sales last month to climb 4.7 percent, to a rate of 5.60 million.