The JSE closed firmer on Friday as general retailers rebounded from oversold levels, led by Truworths, Woolworths and Mr Price, boosting the industrial index.

The all share closed 0.67% higher at 52,794.80 points and the blue-chip top 40 added 0.76%. General retailers gained 3.90% and food and drug retailers 1.11%. Industrials lifted 1.09% and property 0.85%. The gold index shed 1.77%.

General retailers and food and drug retailers were last year’s laggards, with the retailers losing 11%. Food and drug retailers have been negative since the start of the year, but added only a pedestrian 5.24% in 2016.

The market was buoyed by this week’s trading updates from Truworths and Woolworths, indicating that the tide may soon be turning. However, retail sales growth figures to be released next week are still expected to be low.

Retail sales are expected to show growth in November of only 0.1% after October’s 0.2% drop. The most recent retail sales update showed sales growth of 1.9% in the year to October from growth of 3.3% in 2015.

"Consumers’ ability to spend has been constrained by high unemployment, weak real disposable income growth, depressed consumer confidence and stricter credit regulations," said Investec economist Kamilla Kaplan.

European stocks were firmer on the day as automotive stocks gained favour, with the FTSE gaining 0.46%. The Paris CAC 40 added 1.17% and the German Dax rose 0.91%.

The Dow was 0.18% higher at the JSE’s close on financial stocks with JP Morgan Chase exceeding fourth-quarter expectations. Upbeat US data again pointed to solid economic conditions there.

US producer prices edged up a monthly 0.3% in December, in line with expectations, supported by rising energy and food prices. Retail sales were up a monthly 0.6%, slightly lower than the expected 0.7%.

The all share had a solid second week to the year, growing 3.08%. Annualised growth came to 4.18%.

Denker Capital analyst Kokkie Kooyman said the JSE kicked off 2017 on a far better footing than 2016 with the reflation tide from the US expected to bring stronger growth and higher interest rates.

"Financials globally will be the major beneficiaries of this tide," Kooyman said.

Kooyman said bad-news headlines were often already priced in by the time the average investor read them. "Who would have though at the beginning of 2016 that the rand would appreciate 13% against the dollar and the financial index would outperform the all share?" Good companies could and often did overcome bad environments.

Sasol gained 0.99% to R423, despite Brent crude being 0.43% lower at $55.84 a barrel in early evening trade.

Richemont was 0.75% higher at R103.66, ending the week 14.6% firmer.

Harmony Gold dropped 3.52% to R32.03 and Sibanye 2.58% to R26.79.

After falling nearly 2% by midday, Barclays Africa rebounded in later trade, closing 0.06% higher at R171.10. The group’s share price was hit by a leaked public protector report in the Mail & Guardian, suggesting the bank could be forced to pay back R2.25bn it received as part of an "unlawful apartheid-era bailout".

FirstRand added 0.66% to R53.55 and Investec plc 0.53% to R83.27.

Truworths leapt 7.82% to R82.01, Woolworths 3.76% to R68.48 and Mr Price 4.22% to R159.35.

Steinhoff added 2.43% to R70.85.

In property, Hyprop lifted 1.50% to R122.45 and Growthpoint 1.30% to R26.50.

MTN was up 1.81% to R129.98.

Astral Foods jumped 4.10% to R138.99.

Trans Hex rocketed 19.05% to R5; it is in the midst of a takeover bid by retail magnate Christo Wiese.

Coronation Fund Managers ended the day 1.65% lower at R67.77.

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