Higher bullion price helps bourse reach new heights

STOCKS climbed to a third consecutive record close yesterday, as mining companies such as Gold Fields were given a lift from a higher bullion price and European shares rose after data showed the euro zone emerging from recession.

The benchmark Top40 index climbed 0.86 percent to a record close of 38 564.99 points, while the broader all share index was up 0.78 percent to 43 019.21, also a record close.

Resource companies kickstarted the surge to historic highs on Monday, buoyed by signs of demand from China and fresh hunger for gold.

European shares helped maintain the momentum yesterday, after data showed the euro zone emerged from recession in the second quarter, but uncertainty about US monetary policy kept Wall Street under pressure.

“[The surge] is momentum driven,” said Julian Masson, an equities dealer at PanAfrican Asset Management.

“If the market reacts on positive news and that causes the resources to run, any sort of good news after that – it doesn’t really matter if it is a one-on-one correlation – it would cause the market to continue to go up.”

Gold Fields was the biggest blue-chip gainer, rising by 4.15 percent to R61.53, after spot gold rebounded from Tuesday’s 1 percent drop.

AngloGold Ashanti closed 1.62 percent higher at R134.

The gold price also helped Harmony Gold bounce back, adding 1.01 percent to R39.07. It fell almost 4 percent earlier, after saying its quarterly loss widened almost fourfold, hit by a R2.6 billion write-down of its Papua New Guinea assets.

MTN rose 1.55 percent to R199 as investors warmed up to results showing that it posted a 22 percent rise in firsthalf earnings, helped by foreign exchange gains from its international operations.

On the downside, Naspers slumped 4.09 percent to R807.50, the biggest blue chip loss, after its Chinese money spinner Tencent missed analysts’ estimates with an 18.4 percent rise in quarterly profit.