Gold drives JSE to record high
Johannesburg-SA (Feb 20) The JSE struck a record high on Wednesday as higher gold and resource stocks and a recovery by selected industrial counters boosted the market.
The market surpassed its previous high of 47 348 points, struck on January 23.
Analysts said the market turned positive - with only the platinum index missing out - as improved company results added cheer. Firmer global markets, meanwhile, supported rand hedge shares.
At 5pm the JSE all share index closed 0.69% up at 47 438.31 points, with the blue-chip top 40 index firming 0.78%.
The gold index was 1.79% stronger, followed by resources, which collected 1.03% and the industrials climb of 0.69%. Banks were 0.40% firmer and financials added 0.18%, while platinums lost 0.58%.
The Dow Jones industrial index was 0.27% up at 5.13pm with the Paris CAC40 0.12% stronger at the same time. The FTSE100 was 0.19% lower and the Dax had lost 0.10%.
Vunani Private Clients market analyst Viv Govender said the trend in the market remained positive. "The sentiment has been good since Tuesday when BHP Billiton reported strong earnings, indicating that real money was being made in the resources sector."
Some analysts have expressed concern about the high valuations on the market. The JSE all share on Tuesday traded on a price to earnings ratio of 17.64, lower than the 19.5 recorded in January. Govender said this followed the pullback in January, when foreigners sold JSE shares on a net basis.
"Compared to previous pullbacks, January’s was more of a nonevent," Mr Govender said. The highs could be sustainable over the short term as they were supported by solid company earnings. "The big worry is if interest rates are hiked further, which would affect company earnings, mostly banks and consumer shares," he said.
The gold index was supported by a fractionally higher gold price, with indications US hedge funds are still buying into the gold market. The weaker rand also boosted the sector.
Global factors remained a worry, notably in the US where recent economic data painted a less positive view about the US economic recovery. "However, new chair [Janet] Yellen remains very dovish, which could support the US economy in future," Mr Govender said.
Among individual shares Sasol (SOL) was the main driver in the resources sector, closing 3.22% up at R560. BHP Billiton (BIL) continued to find market favour after its strong results earlier in the week, closing up 0.51% at R355.06, with Anglo American (AGL) gaining 0.84% to R285.99.
Among rand hedge shares SABMiller (SAB) was 0.92% higher at R510.18.
Telecommunication shares boosted the overall industrial index with the sector buoyed by MTN’s decision to initiate legal action against regulator Icasa, which has had to withdraw new call termination rate regulations. Telkom (TKG) gained 3.47% to R31.60 with MTN (MTN) 2.75% stronger at R200.69.
Harmony (HAR) was the star among gold shares, closing 2.61% higher at R35.40. AngloGold Ashanti (ANG) gained 2.26% to R194.31.
Retailers ended the day mixed, with Woolies (WHL) gaining 0.32% to R62.20, while Pick n Pay (PIK) lost 1.62% to R44.81 and Shoprite (SHP) was 1.35% lower at R139.
Among media shares Naspers (NPN) gained 0.39% to R1295, a new record high, but Caxton (CAT) was flat at R17.20 after reporting first half headline earnings per share down 5.4%.
African Bank (ABL) was up 1.16% to R10.43 with Capitec (CPI) gaining 1.35% to R195.
Education group Curro (COH) gained 6.31% to R29.98.
Source: Business.iafrica
