/ 1 February 2006

JSE breaks through 20 000 level

The JSE burst through the eagerly anticipated 20 000 level for the first time ever on Wednesday afternoon, led by rampant resources stocks.

At 3.12pm, the all-share index was up 1,51% at 20 043,4, having touched a record high of 20 046,699 a few minutes earlier. The Top 40 index was 1,62% stronger at 18 175,22. It earlier reached a record 18 180,779.

A dealer said there was a lot of futures-related buying coming through on the JSE.

“I think short-term traders were short. People tended to be bearish around these levels. They expected the market to go lower and didn’t expect it to go so strong,” a dealer said.

Only three shares were down on the Top 40 index, which is a good indication that the strength was at least in part futures related.

The dealer added that there was a lot of strength in resources, particularly platinum and gold shares. This had spread to the rest of the market.

While the JSE opened lower on the back of a weaker Dow overnight and expectations of more weakness after Google released disappointing results after the close in New York, it kicked up when European markets turned positive.

Expectations of a down day locally due to the weakness in the United States could have contributed to a short squeeze in the market. — I-Net Bridge