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Johannesburg - The JSE was again in a consolidation mood on Friday morning, and it looks as if the major indices will end the week with very modest gains after a few strong weeks.
This is understandable as technical analysts said on Friday morning that there is still room for profit-taking, because industrial shares are still overbought.
The market is supported by the notion that interest rates in the rest of the world will remain at record low levels for the rest of the year, with the prospect of even more stimulation in Europe. That means there will be more cheap money around looking for a home in equity markets, including emerging markets like South Africa.
Imara SP Reid said on Friday in its daily Market Snapshot that markets are currently driven by expectations that bond yields will be low for some time, which is the reason why Wall Street made some brisk advances on Thursday afternoon.
The All-share index was only 0.36% higher by midday at 53 126 points. Before Friday’s trade the index had gained only 0.76% over the past seven days, which means the index will end the week only about a percentage point higher. The Top 40 index was at that stage 0.36% higher at 47 633 points.
All the major indices were higher at midday on Friday although most of the advances were only marginal. The Financial index gained only 0.25%, while the Industrial index traded 0.42% stronger. The Resources index was taking a breather after a strong week and traded only 0.04% higher. Gold was 0.26% stronger, as precious metal prices dropped after some profit-taking following strong gains earlier in the week due to a weaker dollar.
Two of the giants in the industrial sector, British American Tobacco (BAT) [JSE:BTI] and Bidvest [JSE:BVT], continued on their record-breaking path on Friday morning although the progress was stable rather than spectacular.
BAT gained 0.83% to trade at a record of R775.05 and Bidvest was 0.95% higher at R349.58. The share price gained only 6.49% over the past 30 days, which illustrates how steady it has been.
SABMiller [JSE:SAB] was 0.20% stronger at R810.00 and Sasol [JSE:SOL] was 1.12% up at R428.80. Richemont [JSE:CFR] lost 1.13% to R11.61.
In the financial sector Sygnia [JSE:SYG], which was listed earlier this week, reached another high when it gained 1.94% to R15.45. The share price is now almost 90% higher than the issue price of R8.40.
