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JSE gains for third consecutive day

Johannesburg - The JSE on Wednesday morning continued its upward movement for the third consecutive day in a workmanlike fashion, and analysts said the foundation is being laid for further upward momentum.

By midday on Wednesday the All-share index was another 0.43% higher at 52 766 points, and the Top 40 index traded another 0.43% higher at 47 206 points.

The Top 40 index broke through the important resistance level of 46 820 on Tuesday and the technical analysts of Imara SP Reid said in their daily Market Snapshot on Wednesday morning that the index will most likely again move above the important 65-day moving average in the next day or two. The next important resistance level waiting for the Top 40 index is 47 860 points.

At midday the Industrial index was 0.43% higher and Imara SP Reid said the index has already broken beyond the 65-day moving average.

The Financial index, which has been the best performer over the past two days, gained another 0.24%. Analysts said there is additional technical support for the sector, which was hopelessly oversold.

Even the volatile resources sector was higher for the second consecutive day and gained 0.63% after trading 1.19% higher on Tuesday. Resources shares edged higher despite lower gold and platinum shares.

However, by midday the intraday graphs of most of the major indices were lower than earlier in the day, indicating that investors are taking a breather (and some profit). The All-share index was as high as 52 966 points and the Top 40 index  47 369 points in earlier trading.

There is also strong support from world markets, particularly Wall Street, where medium-term trend indicators retain a positive bias increasing the likelihood of a breakout to the upside. Volatility levels are now also at their lowest level for many months, with the Volatility index trading down at around 12 points.

Global and local markets are on a roll this week after Greece at the weekend submitted bailout proposals that were welcomed by creditors. “Although euro zone finance ministers are still meeting on Wednesday to work on details of the new plan, markets appear to have taken he view that an agreement in Greece is a foregone conclusion," Ric Spooner, chief market analyst in Sydney at CMC Markets, told Bloomberg News.

However, Greece's leaders - elected on an anti-austerity platform - cautioned they had to get any agreement through parliament, with some members of the ruling party claiming red lines on some issues such as tax had been crossed.

Greece must unlock billions of euros in aid before a June 30 deadline to repay International Monetary Fund debt. If it fails it will default, with some warning it could be ejected from the European Union.

READ: Gaps remain in Greek talks with creditors

Among the top industrial shares, Naspers [JSE:NPN] gained another 1.64% to R1 935.82 and the share is now approaching its all-time closing high of R1 980 reached earlier this year. More than 549 000 shares were traded for more than R1bn on Wednesday morning.

SABMiller [JSE:SAB] gained 0.32% to R657.87. British American Tobacco [JSE:BTI] traded 0.32% higher at R690.00, which means that the share is already 5% higher for the past seven days.

Telkom [JSE:TKG], which lost 24.02% of its value over the past 30 days, made a strong recovery on Wednesday morning and traded 5.2% higher at R58.91.

Among the financial shares Sanlam [JSE:SLM] had a good run on Wednesday morning and gained 1.34% to R68.79. FirstRand [JSE:FSR] and Standard Bank [JSE:SBK] were again among the busiest shares on Wednesday morning, but the share prices did not move much. FirstRand was only 0.09% higher at R53.45 and Standard Bank 0.50% on R160.50.

In the resources sector BHP Billiton [JSE:BIL] traded 0.39% higher at R263.50 and Anglo American [JSE:AGL] gained 0.29% to R193.24.

       
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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 Crude
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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