MARKET WRAP: JSE closes higher on Friday, but ends week slightly lower
The JSE resumed winning ways on Friday, but ended a choppy week marginally lower, as the market sought direction from an upbeat budget amid a volatile global environment.
A well-balanced budget speech on Wednesday supported the market on the day, but risk-off sentiment following a hawkish message from the US Federal Reserve unsettled equity markets on Thursday.
Sentiment turned positive on Friday amid speculation that a Cabinet reshuffle by President Cyril Ramaphosa was imminent.
Although a reshuffle will present Ramaphosa with the opportunity to remove inefficient ministers, expectations are that he will proceed cautiously, as the newly-elected president seeks to consolidate his authority in the ANC and the government.
Banks and retailers jumped on Friday on a stronger rand, while property stocks rebounded somewhat, while Resilient lost further ground. Rand hedges were mixed, with Naspers closing lower, while British American Tobacco regained much of what it lost on Thursday.
Platinum and gold shares were softer on weaker metal prices, while Brent crude rose 0.5% to $66.57 a barrel.
The all share was up 0.96% to 58,715.50 points and the top 40 added 0.95%. Food and drug retailers rose 3.13%, banks 2.03%, financials 1.38%, general retailers 1.2%, industrials 1.04% and property 0.56%. The gold index dropped 0.95% and platinums 0.49%.
Barclays Africa rose 3.2% to R203.88 and FirstRand 2.38% to R76.07.
TFG added 3.73% to R225.10 and Mr Price 2.39% to R287.45.
The all share ended the week 0.69% lower and is down 1.33% so far this year.
The rand was last seen at R11.5731 to the dollar, from Thursday’s R11.6558. This despite the dollar edging firmer to the euro.
The local currency continued to find support from the easing of fears of further downgrades of SA’s sovereign debt rating, analysts said.
On Thursday, the Treasury said all three major global ratings agencies had given positive feedback on the tabling of the budget earlier this week.
Nedbank Corporate and Investment Banking analysts said they expected the rand to hit R11.30/$ following the budget speech.
Local bonds were a little weaker after a strong performance earlier in the week. The R186 was last bid at 8.03% from 8.01% and the R207 at 6.61% from 6.57% previously.
Analysts said there should be some position-squaring ahead of the weekend, when the ANC national executive committee will meet.
On Friday evening the US 10-year treasury was yielding 2.8833% from 2.9189%.
The top-40 Alsi futures index rose 1.07% to 51‚726 points, but ended the week 0.73% lower. The number of contracts traded was 14,925 from Thursday’s 17‚083.