Johannesburg - South Africa's broad All-share index closed above 35,000 for the first time in its 17-year history on Wednesday, rising 1.37 percent as telecoms, brewers and banks all gained on hopes of further stimulus by global central banks.
But some market players cautioned the recent rise was overdone, especially given the fragile outlook for growth in Africa's top economy.
“People are bullish for the moment and they will grab onto any headlines,” said Nic Norman-Smith, a portfolio manager at Lentus Asset Management in Johannesburg.
“When you're buying expensively priced equities, on price-earnings of 20 or over on peak earnings, your risk of permanent capital destruction is very, very high.”
The All-share index closed at 35,070.66, a record high since the index began in 1995.
The benchmark Top-40 index finished up 1.56 percent at 30,859.99, its highest since 2008.
Markets have been fuelled by expectations the United States and Europe would take fresh actions to ease the euro-zone debt crisis and rejuvenate the global economy.
The Federal Reserve, which concludes a two-day policy meeting later in the day, is likely to show it is ready to support a weakening US economy but stop short of aggressive measures for now.
The Fed's policy decision will come a day before a meeting of the European Central Bank.
With interest rates around the globe at rock bottom, South African stocks have benefited from relatively high dividend yields as well as hopes for growth in certain sectors, such as retailers, which are expanding into faster-growing sub-Saharan markets.
MTN, Africa's largest telecom, was the top percentage gainer among blue chips, rising 4.1 percent to 155.10 rand. Shares of the company have gained 12 percent over the past six months, driven by its strong dividend yield.
Brewer SABMiller jumped 3.1 percent to 366.33 rand. Shares of the company have gained nearly 42 percent over the last 12 months.
Nedbank, South Africa's fourth-largest lender, inched up 0.3 percent to 181.18 rand. The bank reported an expected 24 percent jump in first-half profit, boosted by a turnaround at its retail arm.
Shares of private hospital group Mediclinic jumped 6.9 percent to 42.80 rand after it said it plans to raise $608 million through a rights offer to refinance debt and fund expansion.
Investors focused on the benefits of its lower-cost debt than the dilutive impact of the rights issue.
Trade was relatively slow, with just 145 million shares changing hands on the JSE, compared with last year's daily average of 255 million shares. - Reuters