The JSE ended higher paced by Kumba Iron Ore (KIO) after a brokerage house upgraded its target price while positive momentum continued on overseas markets.

The all share index closed 0.56% higher. Resources added 1.09%, the platinum mining index climbed 2.03% but the gold mining index was flat (+0.05%). Industrials and financials both firmed 0.19% while banks edged up 0.08%.

The rand was bid at 7.02 per dollar, from 7.03 when the JSE closed on Monday, while gold was quoted at US$672.65 a troy ounce from $679.40/oz at the JSE’s last close.

“The market is generally taking a lead for positive momentum on world markets – Europe’s green, the Eastern block posted moderate gains and the rally in Wall Street continues,” a Johannesburg-based dealer said.

Leading the local bourse on the upside was Kumba Iron Ore (KIO) after brokerage house Merrill Lynch upgraded its target price following better iron ore price forecasts, dealers said.

Shares at Kumba soared 7.73%, or 11.91 rand, to a fresh closing high of 166.01 rand. It earlier achieved a trading high of 168 rand.

Merrill Lynch said earlier that it has upgraded Kumba Iron Ore’s target price to R205/sh price – a massive 38% above the company’s current share price.

This was after Merrill Lynch substantially upgraded its near, medium and long term iron ore prices.

Also putting up a sparkling performance was coal miner Exxaro (EXX) after the National Energy Regulator of South Africa said it has given power utility Eskom a thumps up for its planned 66.2 billion rand new coal-fired power stations with Exxaro as coal supplier.

Exxaro share price surged 6.42%, or 3.89 rand, to 64.50 rand.

On the platinum mining index, junior miner Wesizwe Platinum (WEZ) climbed nearly 4% earlier after the bourse’s operator, JSE Ltd, said that it would join the mid cap index.

But the counter gave up most of the gains to close 1.92%, or 24 cents, at 12.50 rand.

Wesizwe will be replacing construction group Murray & Roberts (MUR), which joins the blue chip Top 40 index in place of the soon-to-be-delisted Edcon.

However, Murray & Roberts fell 60 cents to 60.25 rand.

Gold producer DRD Gold (DRD) surged 7.17%, or 40 cents, to 5.98 rand in what dealers said was a renewed interest in the counter after it said last week it would explore option in uranium mining.

Elsewhere, insurance group Sanlam (SLM) missed out on the rally after brokers downgraded their recommendation to “underweight”, dealers said.

Its share price plummeted 4.16%, or 99 cents, to 22.81 rand.

Barnard Jacobs Mellet said in a research note: “Considering the current valuation, the expected Santam black economic empowerment transaction dilution and the expected difficulty (and additional cost) of reducing excess capital levels, we find it difficult to recommend a holding in the counter at the current time and therefore downgrade our recommendation to ’Underweight’.”

Among platinum counters, Lonmin (LON) gained 5.77%, or 27.01 rand, to 495 rand despite releasing poor interim results.

It reported a loss attributable to shareholders of 2 US cents per share for the six months ended March, compared with earnings of 47.1 cents a year ago after what the company described as a “difficult operational first half”.

Underlying earnings per share, being earnings excluding special items, amounted to 81.5 cents per share, a decline of 28.8 cents from the comparable period.

Anglo Platinum (AMS) was up 2.54%, or 29.09 rand, to 1,174.10 rand and Impala Platinum (IMP) was 1.44%, or 3.31 rand, stronger at 233.31 rand.

Offshore-listed resources giants also rose. Anglo American (AGL) edged up 2.53 rand to 379.50 rand and BHP Billiton (BIL) added 1.26%, or two rand, to 161 rand.

London-listed property stock Liberty International (LBT), which released its quarter results today, was up 2.69%, or 4.60 rand, to 175.60 rand.

Liberty reported adjusted earnings per share of 9.8 pence for the quarter which ended March – up 56% from the 6.4 pence reported for the same quarter in 2006.

Net rental income was up 14% at 91 million sterling pound for the quarter, while attributable profit amounted to 273 million sterling pound.

International IT group Dimension Data (DDT) added 1.80%, or 12 rand, to 6.80 rand. The company said earlier that it has bought an additional 40.1% stake in the Brazilian-based Datacraft Americas Holdings Limited (DCAH), the 100% holding company of Datacraft do Brazil Ltda, for an undisclosed amount.

This brings the Dimension Data Group’s shareholding to a controlling 50.1%.

I-Net Bridge

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