Johannesburg - South African stocks scaled record closing highs on Tuesday due to resurgent appetite for risky assets and aggressive demand for financial companies such as Absa Group.
Financial stocks shot up as foreign investors offloaded bonds and moved into equities, starting with banks. Absa gained over two percent to R171.75 and bigger rival FirstRand added 1.3 percent to R33.33.
Anglo American was the biggest gainer among blue chips in Johannesburg, tracking gains of the company's primary share listing in London.
Anglo took a $4-billion hit to its Minas Rio project, clearing the decks for new boss Mark Cutifani and indicating that the delayed Brazilian operation will eventually get off the ground.
The Top-40 index closed 0.2 percent higher at 36,238.55 and the All-Share gained 0.09 percent to 40,652.96, record closing highs for both.
“Overall, there seems to be a lot of players on the sidelines sitting on cash and slowly finding their way back to the market,” said Greg Davies, equities trader at Cratos Capital.
Gold stocks have wilted as the global economic outlook brightens, taking the shine off the investment seen as a safe haven.
Harmony Gold shaved 1.8 percent to 61 rand and Gold Fields slipped 1.5 percent to R105.60.
Johannesburg stock prices had earlier retreated from historic highs reached in early morning trade as investors booked profits.
“We are making new highs and then we are having pull backs, some consolidation. The market is starting to trade quite sensibly, not having a runaway bull market,” Davies said.
Technical analysis suggests South African shares are in stratospheric territory with the 14-day RSI now at 70 percent. But that does not represent a sell signal because the shares have been on a bull run since 2012.
At least 164 million shares were traded, according to provisional bourse statistics. Decliners outpaced advancers 157 to 148. - Reuters