JSE stocks notch mild gains

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IOL image JSE interior view INDEPENDENT MEDIA The JSE is seen in this file photo: Leon Nicholas.

Johannesburg - South African stocks rose mildly on Monday, their third straight session of gains, with charts suggesting they are close to being overbought and therefore due for a breather after scaling fresh record highs last week.

Sugar producer Tongaat Hulett was one of the few significant movers, gaining 2 percent to 125 rand after reporting a 6 percent rise in year earnings despite tough market conditions.

Overall, the tone was fairly subdued in a session characterized by low trade volumes because of market holidays in London and New York.

Charts suggest the market may struggle a bit in the short term to put in robust gains with the 14-day RSI, a momentum indicator tracked by analysts, now close to 70 for the two main indices, which signals overbought territory.

“When you look at the charts, all your momentum indicators are pushing up without taking a breather and that is always a worrying sign if a bit of consolidation is not happening,” said Abri du Plessis, chief investment officer at Gryphon Asset.

The benchmark Top-40 index closed 0.25 percent higher at 45,005.88.

The wider All-share index closed up 0.14 percent at 50,021.72. Both indices are within striking range of record highs reached on Friday.

Markets took the appointment of President Jacob Zuma's new cabinet in stride, with newly anointed finance minister Nhlanhla Nene seen as a safe pair of hands.

There are question marks over new mines Minister Ngoako Ramatlhodi, a novice to the sector known for his black empowerment views who must tackle a crippling platinum strike which is the longest in South Africa's history.

But Johannesburg's mining index closed 0.58 percent higher at 33,741.16, led by global resources group Anglo American, which added 1.35 percent.

Trade was thin with around 117 million shares changing hands.

Decliners outnumbered advancers 175 to 160, according to preliminary bourse data. - Reuters

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