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Gold, resources rally on JSE

Johannesburg - Share prices were again somewhat lower on the JSE on Wednesday morning, as investors are still busy with sector rotation to look for trading opportunities.

Gold and Resources were the two indices trading higher on Wednesday morning, after being in the red the previous two days. The Industrial and Financial indices were marginally lower.

The Resources index started the day more than 1% lower, but recovered all of its losses when the rand lost ground against the strong dollar. A weak rand is good new news for resources stocks.

READ: Rand firmer but vulnerable to US data

The end result was that by midday the All-share index was only 0.16% lower, while the Top 40 index traded 0.18% lower at 44 830. The Imara SP Reid technical analysts said in their daily Market Snapshot there is still upside potential, as long as the Top 40 index continues to trade above the 200-day moving average until the selling pressure is out of the way.

The volatility of the market is however increasing as investors are looking for a way forward.

It is said that these days happenings on the JSE are not related to the South African economy any more, but reflect what is happening in the global economy, as the major JSE-listed companies earn most of their income abroad.

The overseas picture is improving, with better-than-expected US economic growth data and news that Germany has narrowly averted recession. The US Commerce Department said third-quarter growth came in at 3.9%, up from a previous estimate of 3.5% and easily beating expectations for 3.2% expansion.

Also on Tuesday, Germany released figures showing the eurozone's biggest economy expanded 0.1% in July-September thanks to higher household and government spending. This means it avoided recession after shrinking 0.1% in the previous three months.

By midday the Resources index was 0.41% higher and most of the major resources companies traded higher, although not many of them are still earning a positive return for investors.

One of the shares still in the red for the past year is Anglo American [JSE:AGL] which is still 4.7% higher for the year, although it lost
16.9% over the last six months and 20.2% over the last three months. By midday the share was 1.15% higher at R231.83.

The other conglomerate still in the black for the year is Glencore [JSE:GLN], which was unchanged by midday at R57.30. The return over one year is still 15%, but the share lost 13.7% of its value over the last three months.

BHP Billiton [JSE:BIL] improved by 0.69% on Wednesday morning to R278.07, but the share is already 8.5% lower for the year.

The diversified resources giant that really took a beating is African Rainbow Minerals [JSE:ARI], which was 27.7% lower for the year despite increasing by 0.69% to R133.33. The real damage was done over the last three months when the share lost 31.2% of its value.

The Industrial index lost 0.27% by midday. Among the top shares, SABMiller [JSE:SAB] traded 0.76% higher at R611.70 and Richemont [JSE:CFR] gained 0.32% to R100.70. Naspers [JSE:NPN] was the victim of profit taking for the second consecutive day, as the market has already discounted the strong results announced on Monday.

READ: Tencent drives profit increase at Naspers

By midday the share was 1.49% lower at R1 465.18.
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Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent-ruolie
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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