Picture: MARTIN RHODES
Picture: MARTIN RHODES

The JSE ended a four-week winning streak on Friday, but the rand returned to gains after losing nearly 2% in the first week of the year as geopolitical tension had a deleterious effect on emerging markets.

While global markets bounced back later in the week, an escalation in the feud between the US and Iran prompted risk aversion earlier this week. However, calm was restored in the market after the US signaled that it would not respond with military action against Iran following a missile attack on US forces in Iraq.

“The flare-up in the Middle East was the latest reminder for investors to remain vigilant over geopolitical risks. It remains to be seen whether this is merely a lull in what could be a protracted ‘action-reaction’ cycle between the US and Iran; such a scenario may still have to be factored into investors’ respective asset allocation strategies,” FXTM Market Analysts’ Han Tan said. 

US non-farm payrolls for December came in below market expectations, data showed on Friday. Non-farm payrolls increased by 145,000 from 256,000 in November. This was below the consensus of 164,000, according to Trading Economics. The labour data is considered a crucial indicator of the health of the US economy.

In the coming week, markets will shift focus to negotiations between the US and China as the two economic superpowers are expected to seal a partial trade deal on January 15. 

Soon after the JSE closed, the Dow was up 0.11% to 28,988.35 points. In Europe, the FTSE 100 had gained 0.1% and Germany’s DAX 30 0.32%, while France’s CAC 40 was flat.

Earlier, the Shanghai Composite was little changed while Hong Kong’s Hang Seng rose 0.27% and Japan’s Nikkei 0.47%.

At 5.20pm, the rand had firmed 0.16% to R14.2174/$, 0.12% to R15.7939/€ and 0.14% to R18.583/£. The euro was flat at $1.1109. The rand was 0.64% stronger for the week on Friday evening.

The R2030 government bond also firmed, with the yield falling two basis points to 9.01%. Bond yields move inversely to their prices.

Gold was flat at $1,552.83/oz but recorded its fifth consecutive weekly gain. Platinum added 0.56% to $973.16. Brent crude lost 0.34% to $65.18 a barrel.

The JSE all share rose 0.62% to 57,484.8 points and the top 40 0.65%. Industrials were up 0.98% and resources 0.38%.

Packaging and paper company Mondi said on Friday that its CEO Peter Oswald will be stepping down at the end of March. It said its CFO Andrew King will step in as interim CEO. Its share price was down 3.01% to R307.80

Rand Merchant Investments (RMI) said on Friday that its Australian subsidiary Youi had incurred a loss of between A$25m (about R244m) and A$40m due to the bushfires raging in Australia since November 2019. RMI’s share price fell 0.27% to R29.92.

Sibanye-Stillwater said on Friday that it has used its option to buy DRD Gold shares to up its stake in the gold mining company to 50.1%. Sibanye fell 0.67% to R35.68, but DRD Gold gained 5.07% to R8.29. 

mjoo@businesslive.co.za