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Johannesburg - The short-term technical improvement on the JSE continued on Friday morning as local shares are still recovering from a remarkably oversold technical position.
Technical analysts said the major impetus is coming from the industrial sector, with SABMiller [JSE:SAB] still making a major contribution as the potential offe” from Anheuser-Busch InBev continues to contribute to upside momentum.
By midday on Friday the share price of the second-biggest company on the JSE gained another 1.92% to yet another 52-week high of R785.33. SABMiller’s share price is now almost 20% higher than a month ago, when it became known the world’s biggest brewery group is interested in the JSE-listed group.
The Industrial index was therefore 1.17% higher by midday as the biggest share on the JSE, the international cigarette group British American Tobacco (BAT) [JSE:BTI], also reached another 52-week high of R769.9 after gaining 2.08%. BAT has solidly gained 17% over the past three months. The share price received a new impetus on news that the company is venturing in the e-cigarette market.
As a result the All-share index was 0.92% up at 50 982 points by Friday midday. Since Monday night, when the market closed lower at 49 303, the index has gained more than 1 600 points or more than 3%.
The Top 40 index was 1.06% stronger at 45 732 and, according to Imara SP Reid, is preparing for an onslaught on the important 200-day moving average. The Financial index was 0.82% higher supported by an improved rand, which is the highest in a week-and-a-half, while the Resources index traded 0.60% higher.
The local market and the rand received some support after the latest purchasing managers' index in China showed Chinese manufacturing activity was stronger than many investors had anticipated.
“It appears as if markets are relieved about this with commodities and the rand finding some support,” Standard Bank said in a market note.
The markets are however also waiting for the latest US jobs report to be published later on Friday and it put a cap on the market’s gains, as investors are worried that a strong report will increase the possibility of a US interest rate hike later this year.
Sappi [JSE:SAP] was also one of the strong performers on Friday, gaining 3.87% to R44.80. The share gained 9.44% over the past seven days after the company’s latest results showed it is benefiting from the weak rand.
Sasol [JSE:SOL] was 1.74% higher at R402.51, despite the oil price again dipping under $48 per barrel. Sasol is one of the steadiest shares around, despite the volatility of the oil price. It has changed only 1.22% over the past 30 days
Platinum shares were in the news again after the platinum price and shares of platinum producers were hammered by the fallout of the Volkswagen emission scandal. Lonmin [JSE:LON] was the leader of the pack, with an improvement of 11.58% to R4.24.
The share on Monday night traded at R3.12, which meant the stock is now about a third higher than its previous low. It is however still 43.4% lower than a month ago and 84.9% weaker than three months ago.
The retail sector was a mixed picture, with Massmart [JSE:MSM] recovering strongly but Pick n Pay [JSE:PIK] falling victim to profit-taking.
READ: Pick n Pay plummets on trade update
Massmart, which lost 30.4% of its value after disappointing results, traded 4.2% higher at R11.81. Pick n Pay traded 6.18% down at R62.86 after a strong run recently during which various new 52-week highs were set; the share price has risen almost 10% over the past month.
Woolworths [JSE:WHL] lost 0.58% to R97.50. The share price is still very stable despite some protest action against the group by pro-Palestinian groupings. It has lost only 0.72% over the past 30 days, rising 1.22% over the past 90 days.
In the financial sector, Standard Bank [JSE:SBK] gained 1.04% to R140. Before Friday the share had lost 15% over the past three months. FirstRand [JSE:FSR] was 0.38% stronger at R50.25.
