JSE could rebound from February lows in line with global peers
Rand hits highest level against dollar in five months with commodity shares likely to climb on the JSE
The JSE is likely to rise on Friday, halting a two-day slide that dragged the all-share index to its lowest level since early February.
Industrial heavyweight Naspers and its global internet arm Prosus could rebound, after shares of the Chinese technology titan Tencent showed signs of stability after falling 6% on Thursday as Chinese authorities reportedly enforced compliance with new regulations, which limit the amount of time children can play video games.
Naspers has a 29% stake in Tencent through Prosus. Both Naspers and Prosus fell 8% and 6%, respectively, on Thursday.
Elsewhere, the rand pushed to its highest level in five months against the dollar, stretching its month-to-date gains to 2.3%, outpacing its emerging-market peers.
The rand has been resilient this week in the face of a risk-off environment, which played out on the JSE over the past two days. SA’s currency was up 0.27% to R14.17/$, from R15.40/$ just more than three-week ago, which was its weakest level in five months.
The stronger rand helps reduce the cost of imports, thus helping to contain inflation. The price of Brent crude was up 1% to $72 per barrel.
Other commodity prices were higher on the day, which could potentially translate into high commodity shares on the JSE. Still, commodity shares have been heavily sold in recent weeks, which opens a opportunities for bargain hunters.
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