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Johannesburg - Resources shares joined the party on the JSE on Friday morning and by midday the index was more 3% higher than at Thursday’s close.
This helped push the All-share index even higher and by midday it was firmly above 55 000, after closing at a new high of 54 687 on Thursday.
The Resources index was the last one to get going, as most other indices are already at new records.
The Top 40-index broke through 49 000 for the first time on Friday morning and the Industrial index, which is also in record territory, was on its way to break through 70 000 after it reached 68 000 for the first time earlier this week.
There seems to be no apparent reason for the strong run in share prices, as most economies worldwide are in still in the doldrums, with the exception of the US which is looking stronger but still fragile. In South Africa load shedding, possible labour action in the mining and public sectors and uncertainty over xenophobic attacks are all taking a toll on investor confidence.
The one positive is the fact that foreign investors are still seeking better yields in emerging markets like South Africa, as interest rates will remain at record low levels in the developed world as monetary authorities are trying to breathe new life in their economies.
By midday on Friday the All-share index was 1.13% higher at 55 305 points, while the Top 40-index traded 1.31% high at a new high of 49 044 points. The Industrial index was at that stage 1.08% higher and just below the 70 000 level at a record of 69 971.
The Financial index was only 0.21% higher, but that was enough for a new record level of 17 934 points.
The technical analysts of Imara SP Reid said in their daily Market Snapshot that the JSE will enjoy further marginal advances on Friday as improvement in near-term indicators as well as medium-term trend metrics continues.
Although the indices are regarded as high, there is no evidence of weakness in momentum figures for the moment and further upside is indicated by the general technical structure and market tone for the index.
The major surprise is however the resources sector, as the macro-economic data out of China is still disappointing and commodity prices remain depressed. However, the shares are supported by a slightly weaker dollar.
Some analysts think investors looking for value are realising there are opportunities in the resources sector. There is also a perception that the strong run in Chinese stock markets is discounting a possible turnaround in the Chinese economy.
Imara SP Reid said the short-term metrics in the resources sector are still improving, and exposure to the sector from a trading perspective should be retained as additional upside is possible.
By midday on Friday the sector was 3.17% higher after gaining 2.06% on Thursday.
This means the Resources index is 3.7% higher for the past seven days, about the same as for the year to date.
Anglo America [JSE:AGL] was one of the star performers and by midday on Friday was 4.27% higher and back above R200 for the first time since March 8. It traded at R200.64, still more than 8% lower for the year to date. BHP Billiton [JSE:BIL] improved by 3.42% to R288.42.
Among the big industrial shares, Sasol [JSE:SOL] is still supported by the oil price edging upwards and it traded 2.08% higher at R487.01. This means that Sasol has gained 20.12% over the last month. Brent crude traded at $65.44 on Friday morning.
Naspers [JSE:NPN] was 0.51% higher and SABMiller [JSE:SAB] traded 0.27% stronger at R655.94. Mondi [JSE:MND] was one of the busiest shares on Friday and the share price gained 1.88% to R244.50.
MTN [JSE:MTN] increased by 3.49% to R23.03 after the group announced that its subscribers grew by 1.8% in the first quarter.
