Johannesburg - South African stocks steamed to record highs for the fourth straight session on Tuesday, lifted by gold producers such as AngloGold Ashanti and a big jump for retailer Pick N Pay.
Shares of South Africa's second-largest grocer jumped nearly 8 percent after it reported a double-digit rise in first-half profit, a sign a costly strategy to win market share and streamline its supply chain is starting to work.
BHP Billiton also helped blaze the upward trail, its shares adding over 4 percent after the global mining group upgraded its iron ore production target for 2014 and posted a quarterly record for petroleum output.
Johannesburg's Top-40 index, which scaled the 40,000 mark last week for the first time in its 18-year history, ended the day at a record close of 40,544.23, after rising 1.12 percent.
The wider All-share index also finished at a life high, climbing 0.96 percent to 45,357.81.
But technical factors could weigh as the 14-day RSI - a momentum indicator tracked by chartists - shows both indices have strayed into overbought territory, suggesting they could be in for a correction.
Analysts also say fundamentals do not point to a sustained record run, with the central bank forecasting growth this year of only 2 percent for Africa's largest economy.
“It's getting ridiculous now. It can't go on forever. Most people thought it would have stopped already,” said Christie Viljoen, an economist at NKC Independent Economists.
“The fundamentals are not there, maybe in another country but not in South Africa, because the outlook for the next 12 months is not good. There is weak economic growth and no possibility for another interest rate cut,” he said.
South African stocks have been lifted by the flow of “easy money”, and global equity markets rose for a fifth straight session after weak US jobs data reinforced expectations the Federal Reserve will keep policy ultra-loose into 2014.
This fed into a rally of gold's spot price, which rose 1.3 percent to three-week highs over $1,330 an ounce.
The Fed's stimulus programme is seen as good for gold because it enhances its reputation as an inflation hedge.
In response, AngloGold, Africa's top bullion producer, soared almost 8 percent to 158.82 rand, making it the biggest Top-40 gainer.
Advancers edged out decliners 145 to 143, according to preliminary bourse data, while 60 listings were unchanged.
Around 173.5 million shares changed hands. - Reuters