Resources, gold fuel JSE run

Johannesburg - The upward momentum on the JSE, which started last week, seems to be gaining real momentum.

The All-share index earlier this week moved above 50 000 points, and towards the end of trading on Tuesday the 51 000-point level was very much in sight.

Usually when the market starts to move decisively, it is the big dual-listed stocks which also attract foreign interest and push the market higher. It is again the case.

Most of the dual-listeds were higher, with the exception of one or two which ran too far the last few days and took a breather. Naspers [JSE:NPN] is one those after reaching a new all time high on Monday.

Late afternoon, the All-share was 1.21% higher on 50 947 points and the Top 40-index moved 1.31% stronger to 44 777 points. It is now well above important resistance levels, which indicates that the market is gaining sustainable momentum unless some crisis develops from for example the situation in Greece, which so far has had very little influence on the local stock market.

European stocks did not react much on Monday to the news that the anti-austerity party in Greece won the weekend’s elections, but on Tuesday nervousness about the situation in Greece set in and important European markets edged lower.

It seems the new Greek government is set for a collision course with creditors over plans to renegotiate its enormous bailout, analysts said.

Locally, even the Resources sector, which lost serious ground on Monday on disappointing manufacturing data from China, recovered strongly on Tuesday. The Resources index gained 2.07% and the Gold index was 4.18% stronger despite a slightly lower gold price.

The rand lost some ground against the dollar, which is good news for mining companies who are paid in dollar for their exports.

Glencore [JSE:GLN], which lost more than 6% on Friday and dropped even further on Monday, made a very strong recovery and gained 4.86% to R44.84. BHP Billiton [JSE:BIL] gained a solid 3.14% to R250.28 and Anglo American [JSE:AGL] was 1.18% higher on R192.09.

Amongst the big industrial shares SABMiller [JSE:SAB] traded above R600 again after it rose 2.2% to R606.01. Richemont [JSE:CFR] is heading towards R100 again and was 1.66% higher on R98.24.

The Industrial index was 0.53% higher.

Naspers [JSE:NPN], which reached a new all time high on Monday, was 0.94% lower on R1 688.02. The share was the busiest in terms of turnover and the price fluctuated sharply for most of the day.

Aspen [JSE:APN], whose strong run got another injection when it was announced that it bought a popular drug for thrombosis, lost 1.53% to R436.20 on profit taking. The share is still 14.2% stronger for the past 30 days and 79% higher for the past year.