The JSE All-share Index, which was hovering above 44 000 last week, broke through 46 000 on Tuesday morning, supported by a weak rand, higher commodity prices and improved global sentiment.
At midday the All-share index was on 46 109, almost 4% higher than a week a ago, whenit reached 44 452 after eight days of consecutive losses. That was the longest losing period since 2004.
The global sentiment is better than a week ago, but the strong market driver is now higher commodity prices and the weaker rand, which is good for the income of mining houses.
The All-share increased this morning with 0.41% to 46 109, and the Top 40 Index traded 0.50% higher at 41 527. The strongest performer was the resources index, which traded 1.05% stronger at 55 430.
The gold price was 0.78% higher on $1 284 at midday, while the platinum price improved with 0.84% to $1 392.
Imara SP Reid however warned in its Morning Watch that resources could be overbought now relative to the macroeconomic environment into which commodities were being sold.
The demand for resources shares was “workmanlike”‚ rather than brisk.
The broking firm’s analysts also warned that from a technical perspective the Top 40 Index will face crucial short-term resistance at around 41 780, and that the index needs to break this level on higher volume support for further improvements to materialise.
An inability to break through this resistance level would lead to selling pressure, driving the index back to 40 800 points.
Investors have one eye on Federal Reserve chairperson Janet Yellen’s testimony before the House of Representatives financial services committee later on Tuesday, and another on the Senate banking committee on Thursday.
The market will be looking for the Fed’s reaction to the poor jobs data in the US announced last week, to see if there is a possibility of the central bank scaling down the tapering of its economic stimulus, which will be good news for emerging markets.
Diversified global miner Glencore rose initially with more than 3% after releasing a production report to end-December indicating growing output. The share price later lost ground and at midday it was only 30c or 0.51% higher at R39,66
Anglo American‚ one of the best performing mining shares over the past month‚ rose another 592c or 2 183% to R278.00. BHP Billiton, which is considering selling out its global thermal coal business, traded at R334,71, an improvement of 386c or 1.17%
The top performer among the gold share were Gold Fields, which traded 90c or 2.23% higher R41.31, and Harmony, which rose 92c or 2.98% to R31.831.
Among banking shares Barclays Africa was 589c or 4.75% higher at R129.952 from oversold positions. The group on Tuesday morning reported its full-year headline earnings per share were up 14%.
Sanlam’s share price, which rocketed 5.7% on Monday on a trading update that its headline earnings for the full year will be 30% to 35% higher than the previous year, strengthened further on Tuesday morning. At midday it traded 50c or 0.98% higher as R51.50.