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Johannesburg - The JSE opened the new year with a strong showing on Tuesday, on the back of European markets which opened 2017 on record highs.
International markets received a boost from manufacturing data from Europe and China, indicating the international economy is on a much stronger footing than a year ago.
In early trade all major indices on the JSE were almost 1% firmer than the closing level last week, but the market lost momentum later on.
The local market drew much support from European markets as almost all the big dual-listed shares on the JSE, which represent more than half of its value, are also listed on the London Stock Exchange.
Strong manufacturing data is also good news for resources demand, and at mid-morning the resources index was 0.77% higher after gaining more than 1% in early trade.
At that stage the All-share index was 0.62% up at 50 968 points, while the Top 40 index gained 0.74% to 44 227 points. The All-share index closed the previous year 2.5% higher, but the Top 40 index was about 2% lower.
By mid-morning the Industrial index, which includes most of the dual-listed shares, traded 0.65% higher with the Financial index 0.88% firmer. The Gold index was however 2.09% lower due to some profit-taking after a strong run at the end of last year.
Earlier in the day, strength in financials and commodity-related stocks continued to underpin European equity markets with Britain's FTSE 100 starting the new year at a record high on Tuesday. The pan-European STOXX 600 index rose 0.7% in early deals, climbing to its highest level since December 2015.
The market received a boost from IHS Markit's 2016 Manufacturing Purchasing Managers' Index for the eurozone which registered 54.9 in December, its highest since April 2011. That was well above both the 50 mark which separates growth from contraction, and above November's 53.7.
German manufacturing growth reached its highest in almost three years, driven by rising demand from Asia and the United States. French manufacturing hit a five-and-a-half year high, and Italian manufacturing activity grew at its fastest rate since June.
Asian shares were also higher after a private business survey showed China's factory activity picked up more than expected in December as demand accelerated, with output reaching a near six-year high. Strong manufacturing growth in China is good news for local resources shares as China is the biggest buyer of South African commodities.
Among the top commodity shares, Anglo American [JSE:AGL] traded 1.46% higher at R200.66. BHP Billiton [JSE:BIL], which gained 28.6% over the previous year, lifted 1.29% at mid-morning to R221.50.
Naspers [JSE:NPN], the biggest share on the JSE with strong commercial ties to China, was 0.83% up at R2 030.70. The share price closed 2.23% lower last year, but at one stage was more than 22% firmer when it reached a new record of R2 530 in September.
Steinhoff [JSE:SNH] was 0.46% softer at R70.95. The share price reached a high of R96.85 in April last year, but then lost momentum and closed 2016 6.7% down.
The top banks continued their strong performance of last year. Standard Bank [JSE:SBK], which gained 36.3% last year, added 0.86% to trade at R153.06. FirstRand [JSE:FSR] was 1.47% stronger at R53.95 after adding 3.32% the previous year.
