JSE ends week higher as global sentiment supports broad-based gains
The JSE closed higher on Friday in renewed global risk-on sentiment as markets took the view that the pullbacks earlier in the week may have been overdone.
At comfortably above the 54,000-point level, the all share closed at its highest so far this year as industrials gained on the weaker rand and miners rebounded on firmer commodity prices in an about-turn from Thursday’s risk-off trade.
The platinum price gained 1% to $942 an ounce and gold rose 0.50% to $1,253. Gold was 2% up for the week, its best performance since mid-April.
Jitters about Donald Trump’s controversial presidency, more specifically the firing of FBI director James Comey, saw the Dow Jones industrial average experience its worst one-day fall so far this year on Wednesday.
Despite Friday’s upbeat start, the Dow was set to end the week lower in its worst weekly performance since March.
Investors took flight to safe havens, such as US treasuries and gold, as the dollar was sold off amid indications that Trump will struggle to implement his tax reform and infrastructure plans, which have been driving markets higher up to now.
The Dow was 0.51% higher at the JSE’s close, mainly on Apple, while European markets also rallied on the day. The FTSE 100 was 0.39% higher and the Paris CAC 40 gained 0.56% after President Emmanuel Macron pledged solidarity with German Chancellor Angela Merkel on EU unity after their first meeting as leaders.
The local market saw a recovery in the rand after concern about renewed corruption developments in Brazil had caused emerging-market currencies to fall sharply on Thursday, with the rand down 3% at one point.
At the JSE’s close the rand was 1.37% firmer at R13.2413 to the dollar, causing some of the rand hedges to lose ground. Naspers ended the day up in choppy trade, and gained a weekly 1.56%. But retailers and banks rebounded.
Local market sentiment was positive ahead of next week’s consumer inflation data and the Reserve Bank’s interest-rate decision.
Consumer inflation is expected to soften below 6% to within the Bank’s target band of 3% to 6%. However, the rand’s wild gyrations on Thursday probably put paid to any thoughts the Bank had about considering lowering rates. The Bank previously warned the volatile rand posed a threat to lower rates, although the rate-hiking cycle had peaked.
"We don’t believe the lower inflationary data will be enough for the monetary policy committee to lower the repo rate," said FNB economist Mamello Matikinca, adding that the hiking cycle may be over, but cuts are still some way off, if they materialise at all.
The all share closed 0.42% higher at 54,427.30 points and the blue-chip top 40 added 0.4%. General retailers rose 1.97%, platinums 1.63%, industrials 0.63%, food and drug retailers 0.59%, resources 0.51%, and banks 0.37%. Financials shed 0.19%.
The all share ended the week 0.67% higher. It is up 7.45% so far this year.
Anglo American rose 1.48% to R188.73 and Kumba Iron Ore jumped 6.71% to R163.
Global luxury goods company Richemont rose 0.79% to R111.24.
Imperial Holdings gained 4.21% to R165.53 as the market warmed to plans mooted in the week whereby the group is set to be split in two.
Remgro dropped 1.96% to R220.75.
AngloGold Ashanti was up 1.28% to R156.98.
Anglo American Platinum rose 2.10% to R314.63.
Among banks, FirstRand was up 0.63% to R49.71, but Nedbank shed 0.72% to R213.05.
Old Mutual lost 1.23% to R33.
Steinhoff rocketed 6.16% to R73.38. The group plans to merge its African interests with that of Pepkor in a separate listing.
TFG rose 2.77% to R139.77 and Truworths firmed 2.49% to R74.50. Massmart Holdings ended the day 2.55% higher at R121.42.
Dis-Chem Holdings jumped 4.40% to R26.10.
Vodacom was 0.96% higher at R162.39.
Sugar producer Tongaat Hulett was up 4.18% to R118.35 following a trading update in which it said it expected full-year headline earnings to rise by as much as 45%.