Softer rand helps resources shine

The all share ended a choppy week on a weaker note, slipping below the 52,000 level to 51,900.30 on Friday, 0.74% off on the day.

For the week, it was 0.56% higher, the third successive week on the upside, as resources outperformed on a weaker rand.

As local political issues influenced the market and with global equity markets under pressure ahead of looming interest rate increases, the all share is still 2.46% up in 2017.

As the market eyed data for clues to the prospects for GDP growth, market sentiment was dominated by the release of US nonfarm payroll data on Friday. Employment numbers came in higher than expected, resulting in risk-off trade hitting local banks and retailers. But US inflationary pressures remained subdued, which helped to offset a hawkish US Federal Reserve.

Market heavyweight Naspers closed 0.77% lower at R2,474.71 on Friday, ending the week 2.76% down. It was the second weekly loss in a row for the shares, which are trading at high valuations.

Investors have become more skittish about Naspers’s prospects following the issuance of a $1bn bond, which will partially be used to settle existing debt. Moody’s rated the debt a notch above subinvestment grade.

Global mining stocks had a good week, with Anglo American gaining 3.37% and BHP jumping 7.33%. But it was a subdued week for gold stocks, with the gold index edging up a weekly 0.35%.

After initially standing firm on the nonfarm data, the rand weakened in later trade. The euro was at $1.1392, from $1.1424.

Bond yields continued their gradual retreat from the beginning of the week as US bonds were sold off ahead of an expected higher interest rate environment. The yield on the R186 was at 8.94%, from 8.91%.

The futures market followed the weaker JSE. The local near-dated, top 40 Alsi futures index was 0.79% lower at 45,850 points. The number of contracts traded was 28,702 from Thursday’s 20,392.