Picture: JSE
Picture: JSE

The JSE snapped a five-week losing streak in spectacular fashion on Friday, with the 6.75% weekly gain in the all share the best performance since February 2009.

Analysts expect that the index’s good fortunes may continue and could push to 56,000 points. It closed 1.29% higher at 54,271 points on Friday, largely as a result of Naspers, although banks had a good run as well. 

World stocks surged on Friday, boosted by comments by President Donald Trump that he is confident a trade deal can be brokered between his country and China.

Market heavyweight Naspers led stocks higher, surging 13.29% during the week, while the banking index jumped 9.49%. 

The JSE’s rebound comes after a cumulative 11% fall in September and October, a period where most global equities markets were also under pressure.

The market has recovered 50% of the bear wave, and the current rally could reach a support line at 56,413, said Nedbank Corporate and Investment Banking strategists Neels Heyneke and Mehul Daya in a note to clients.

It is difficult to gauge whether the momentum in the JSE will hold , said Sasfin Wealth's David Shapiro. “We need ongoing good news to cement a proper turnaround, and it won’t be driven by what is happening here, it will be driven by global markets,” he said.

Many of the issues concerning markets persist, and despite positive news around the US and China, further tension could be in the offing, said Shapiro. However, “overall people are feeling a bit more optimistic”.

Retailers and banking stocks were given a fillip by a falling oil price, which dropped below $73 a barrel. Brent crude has come under pressure amid signs of rising supply globally, although the imposition of US sanctions on Iran later in November is being closely watched.

Naspers  was boosted last week by positive earnings reports by US technology companies and a decision by global index agency MSCI not to penalise it for its dual-share structure. Signs that the US and China were moving to repair trade relationships helped the performance of associate Tencent, as did better-than-expected third-quarter results from Facebook.

It has been a shocking year for Naspers’s share price and it was about time it went up for a change, said Vestact analyst Paul Theron. “We were buyers of Naspers at its all-time high above R4,000 a share a year ago, and we are most definitely still buyers at current levels,” he said.

Richemont was also a beneficiary of news that its shares would not be penalised in index rankings, rising 5.63% during the week.

Gold miners fared worst, falling 6.63% for the week, despite support for precious metal prices due to a weaker dollar. The rand firmed about 2% during the week, while resources in general performed well.