Johannesburg - South African stocks closed at all-time highs on Thursday led by Swiss luxury goods group Richemont [JSE:CFR] after a brokerage upgrade and as the market found support from positive economic data from the United States and China. The benchmark Top 40 - (Tradeable) [JSE:J200] index closed up 0.7% at 33 239.18, the highest in its 17-year history. The broader All Share [JSE:J203] index finished up 0.59% at 37 377.32, also an all-time high.
Richemont shares surged 4.69% to R59.20 on the JSE, while also boosting European stock markets with a 5.5% surge in the share price after Bank of America Merrill Lynch raised its rating on the stock to “buy” from “underperform”.
The increase in Richemont’s share price also lifted rival LVMH, which rose 3.2%, and those two stocks contributed to some of the biggest points gains on the FTSEurofirst 300 index.
Central Markets senior trader Joe Neighbour said he had followed the general positive investor sentiment towards European equities.
However, he was more cautious on the luxury goods sector, since the industry is heavily reliant on consumer demand in China, which has shown signs of a slowdown in growth.
“The luxury goods companies have had a very good run, but if China does start to feel the pinch, then they may find it hard to repeat that performance over the next 12 months,” he said.