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UPDATE 1-South African stocks close at record highs
January 24, 2013 / 3:50 PM / 5 years ago

UPDATE 1-South African stocks close at record highs

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JOHANNESBURG, Jan 24 (Reuters) - South African stocks closed on Thursday at new peaks as world shares hovered near multi-month highs and a weaker rand made local shares cheaper for foreign investors.

Gains were generally across the board, with luxury-goods maker Richemont the biggest riser among blue chips, adding 3 percent to 74.62 rand as it rebounded from a sell-off sparked by disappointing sales figures earlier in the week.

The All-share index ended the day 1.04 percent higher day at a new peak of 40,604.59, while the benchmark Top-40 also finished at a record, climbing 1.15 percent to 36,151.00. It was the second straight day of gains for Johannesburg equities.

“It all points to the weaker currency and global markets being at multi-year highs,” said Sasha Naryshkine, an analyst at asset manager Vestact.

South Africa’s rand fell to its lowest in nearly four years against the dollar on Thursday as investors concerned about the risk from labour unrest and violent protests opted for other emerging market assets.

The sour sentiment towards the rand could spread to equities and cap gains going forward.

Headwinds are gathering on other fronts. Technical indicators suggest both indices have strayed into overbought territory while global markets could move off their multi-month highs because of growth an earnings worries.

Apple’s revelation on Wednesday that revenues had missed forecasts for the third straight quarter are among the jolts that are starting to give global equity investors pause.

South African stocks have been on a record run for months, defying a gloomy economic outlook including sluggish growth and widespread labour and social unrest.

The central bank on Thursday cut its economic growth forecasts to 2.6 percent for this year from a 2.9 percent expectation previously, saying growth remained below potential, as it kept its key lending rate on hold at 5.0 percent. (Reporting by Ed Stoddard; Editing by Ed Cropley)

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