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Johannesburg - All the major indices on the JSE were again higher by Thursday midday as the market bounced back from a much-oversold position earlier in the week.
Technical analysts said the rebound, which started on Wednesday, was due and further upside potential is possible as the world markets are also on the up after one of the worst quarters in many years.
By midday the All-share index was 1.23% stronger at 50 703 points and the Top 40 index gained 1.28% to 45 574 points. The Resources index was the strongest performer as some of the recent big losers such as Glencore [JSE:GLN], Lonmin [JSE:LON], Anglo American [JSE:AGL] and ArcelorMittal [JSE:ACL] all continued with their strong recovery which started earlier the week.
At midday the index was 3.46% higher than Wednesday’s close.
The technical analysts of Imara SP Reid said in their daily Market Snapshot that the Top 40 index will launch an onslaught on the 65-day moving day average within the next day or two, but the upward momentum will be only sustainable if it is supported by high volumes.
The analysts said Wednesday's strong performance was a combination of a technical rebound and some window dressing after the market had one of its worst quarters in year. The recovery did however establish upward momentum, which leaves more room for improvement.
World markets also look more positive after all the major indices on Wall Street closed more than 1.5% higher. The third quarter was the worst in almost four years on Wall Street.
The Chinese markets were closed for a public holiday but the other Asian markets also made good progress
The latest purchasing managers' index which measured manufacturing activity in China was also slightly stronger than expectations, but the Chinese markets could not respond as they were closed.
By midday the Resources index was 3.46% higher. Glencore performed strongly for the third consuctive day after losing almost 30% on Monday, and by midday the share had gained another 2.35% to R19.61. The stock was however at one stage more than 3.5% higher at R20.49.
Lonmin gained another 12.29% by midday on Tuesday to trade at R3.93 and at one stage was more than 14% higher, after losing more than 50% of its value in less than 30 days. ArcelorMittal, which lost 12% over the past seven days and almost 30% over the past 30 days, at midday was 5.26% stronger at R9.00.
Anglo American also started to recover after losing almost 10% of its value on Monday. The share price hardly moved the previous two days but on Thursday morning it gained 2.93% to R118.93 and traded as high as R120.16. Anglo’s subsidiary, Anglo American Platinum [JSE:AMS], was 7.77% higher at R246.88.
The Industrial index gained 0.87% supported by the two biggest shares in the sector, British American Tobacco (BAT) [JSE:BTI] and SABMiller [JSE:SAB], which both reached new highs. Imara SP Reid said the index again consolidated above its 200-day moving average.
SABMiller, which is supported by expectations of a lucrative offer from Anheuser-Busch InBev, gained 0.56% to trade at a new high of R784.36. BAT traded as high as R765.31 in early morning trade, a new high, but lost momentum and at midday was 0.17% softer at R759.01.
Among the other well-known shares on new 52-week highs the PSG group [JSE:PSG] traded 2.46% higher on a new high of R22.50, while Reinet [JSE:REI], the investment firm in the Rupert stable, was 0.64% higher on a record of R29.70. Steinhoff [JSE:SHF] reached yet another high of R85.17 after gaining another 0.6%.
One of the biggest losers was Nampak [JSE:NPK], which traded 6.67% lower at a new 52-week low of R24.08. Before Thursday’s drop the share had already lost 38.57% over the past 30 days.
The Financial index, which improved by 1.38% on the back of a slightly stronger rand, broke through a minor resistance level, but technical analysts said shares are not out of the woods yet.
