Share

JSE maintains rally as global mood lightens

Johannesburg - The improved mood on world markets had a positive influence on the JSE on Thursday and the major indices were up by midday for the second consecutive day.

Technical analysts however warned investors to continue being circumspect despite the short-term technical rebound. “Any decisive engagement of equities at current level is unlikely to be rewarded in a sustainable fashion.”

Imara SP Reid said in its daily Market Snapshot that improvement offers a degree of technical encouragement, but the trading environment remains challenging.

Some indices did however breach important resistance levels which could change the technical picture if those gains can be sustained.

By midday the All-share index was just below the 50 000 level and traded another 1.54% higher at 49 988 points. The Top 40 index gained 1.73% to 44 755 points. It was at that stage above the important resistance level of 44 380 points - a good sign if it can stay there on high volumes.

Wall Street's upbeat performance on Wednesday, also for the second day in a row, helped the European markets higher and in Tokyo the Nikkei index was another 2.4% higher.

Markets' attention is now on the latest US jobs report, to be published on Friday, to see what the future holds for US interest rates. Some analysts seem to think that the Federal Reserve will hold back on any interest rate moves until early next year, because of the current uncertainty in world markets which could have a negative influence on global growth.

European shares were also supported by expectations that the European Central Bank, which is meeting on Thursday, will give the markets a dovish boost. The ECB is set to cut its inflation forecasts because of falling oil prices and China's economic slowdown, and will probably promise to beef up its bond-buying programme if prospects weaken further. It is expected to leave rates unchanged.

The stronger performance in Europe gives the JSE a boost as its double-listed shares normally follow the overseas listings higher. The softer rand, which traded around R13.52 to the dollar around midday, also supported these stocks which are all rand hedges as they earn a major part of their income in other currencies.

Many of these shares are part of the Industrial index which by midday was 1.73% higher at 63 607, higher than the important resistance level of 64 200.

Among the big shares Naspers [JSE:NPN] traded 3.10% higher at R1 706.32 and SABMiller [JSE:SAB] was 1.38% up at R625.52. Richemont [JSE:CFR] traded above R100 again and at midday on Thursday was 1.31% higher at R100.60.

The resources sector was 2.76% higher at midday with all the major conglomerates substantially stronger. BHP Billiton [JSE:BIL] gained 2.97% to R225.76 and Anglo American [JSE:AGL] was 3.58% up. Even Glencore [JSE:GLN], which on Wednesday closed at a new 52-week low of R25.85 after losing more than 42% over the past 30 days, recovered 2.86% to trade at R26.59.

Some of the platinum stocks however did not share in the share price surge. Impala Platinum [JSE:IMP] lost 7.37% to reach a new 5-week low of R43.11. The company said on Thursday it plans to raise R4bn by selling shares as a slump in metal prices cut full-year profit by 58%.

In the retail sector Pick n Pay [JSE:PIK] reached yet another 52-week high after it gained 2.52% to R65.10. Massmart [JSE:MSM], which closed at a 52-week low on Wednesday, reached a new intraday low of R112.04 before it started to recover. By midday it was 0.53% stronger at R112.79.

The financial sector was 0.68% stronger but Sanlam [JSE:SLM] did not share in the excitement. The share price tested its previous 52-week low of R59.50 before recovering somewhat. By midday the stock was 2.13% lower at R61.17. Sanlam as recently as April 9 traded at a 52-week high of R81.01, which means the share has ost a quarter of its value over the past five months.               

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Rand - Dollar
18.94
-0.2%
Rand - Pound
23.93
-0.2%
Rand - Euro
20.45
+0.1%
Rand - Aus dollar
12.36
-0.1%
Rand - Yen
0.13
-0.2%
Platinum
911.00
+1.6%
Palladium
1,012.02
+1.0%
Gold
2,215.47
+0.9%
Silver
24.79
+0.6%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.9%
Resource 10
57,251
+2.9%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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