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All-share index tops 50 000 in mid-morning trade

Johannesburg - The JSE's All-share index exceeded 50 000 points for the first time in 2016 on Tuesday morning as the local market followed a rally on global markets.

By mid-morning the index was trading at 50 026 points, 0.35% higher than Monday night’s closing level which was the highest for the year. On Monday the All-share gained more than 2.5% on the back of positive sentiment on global markets.

The positive mood continued on Tuesday morning, with Asian shares extending their gains as a combination of stabilising Chinese markets, rebounding oil prices and solid US consumption data prompted investors to look for bargains after last week's rout.

European markets continued the pattern. Wall Street, which was closed on Monday, also indicated a strong start.

Monday night’s closing level of 49 851 points was the highest since the close of 49 316 points on January 3. Since then the All-share index reached a 52-week low of 46 282 points in the middle of January, which meant it has regained about 8% of its value over the past month.

After Monday’s gain of more than 2.9%, the Top 40 index was  another 0.59% higher at 44 643 points, with the majority of blue chip shares higher.

By mid-morning the indices were however not as high as earlier in the day as the Resources index lost momentum. The index at one stage was a further 2.32% higher as investors continued to pick up bargains in an oversold market, but by mid-morning it was only 1.48% up.

The loss in momentum was mainly due to Anglo American [JSE:AGL] giving up most of its early strong gains on news that the group’s credit rating was cut to junk by Moody’s Investors Service as slumping commodity prices inhibit the London-based miner’s efforts to reduce debt and sell assets.

The Financial index gained 0.32% and the Industrial index 0.20%, but the Gold index was again 3.61% down as the yellow metal lost its safe haven status and the gold price dipped more than $8 per ounce.

Analysts said investors were worried about the reopening of the Chinese market after a week’s holiday, but the market has been remarkably stable and Chinese shares and the Chinese currency have both traded stronger since the weekend.

US retail sales data on Friday showing firm growth also allayed some fears - at least for now - that the US economy could be dragged into recession as growth stumbles in many parts of the world. The dollar also strengthened somewhat against the euro.

Oil prices also soared as news that top officials from the world's biggest oil producers -Saudi Arabia, Russia, Venezuela and Qatar – met about an eventual deal to tackle a massive supply glut.

Local shares were also supported by the firmer rand which traded at R15.71 to the dollar by mid-morning compared to R15.84, as emerging market currencies strengthened on news that the Chinese central bank will not devaluate the yuan even further.

Indications in the State of the Nation address by President Jacob Zuma that the government is taking the present economic situation seriously heightened expectations that next week’s budget will include news that might persuade credit rating agencies not to rerate the country to junk status.

Most of the attention on the local markets was on Anglo American with more than 4 million shares traded for more than R382.6m, the highest in terms of value.

The share initially gained almost 8% to an intraday high of R96.17, but by mid-morning it was only 2.25% stronger at R91.30. The stock recovered spectacularly over the last month, having reached a 52-week low of R53.33 in the middle of January.

Glecore [JSE:GLN] was one of the busiest shares in terms of volume with 5.2 million shares sold for R127.8m. The share price also lost some of its momentum and at mid-morning was 2.96% stronger at R23.74, after at one stage trading 6.2% up at R24.51. BHP Billiton [JSE:BIL] was 3.28% higher at R165.11.

Sasol [JSE:SOL] also performed strongly on news that the price of Brent crude oil is again above $35 per barre,l and the share traded gained 2.49% to R440.51.


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Rand - Dollar
18.90
+0.2%
Rand - Pound
23.85
+0.2%
Rand - Euro
20.39
+0.2%
Rand - Aus dollar
12.32
+0.2%
Rand - Yen
0.12
+0.2%
Platinum
908.05
0.0%
Palladium
1,014.94
0.0%
Gold
2,232.75
-0.0%
Silver
24.95
-0.1%
Brent Crude
87.00
+1.8%
Top 40
68,346
0.0%
All Share
74,536
0.0%
Resource 10
57,251
0.0%
Industrial 25
103,936
0.0%
Financial 15
16,502
0.0%
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