JSE records impressive gain
The JSE snapped a fiveweek losing streak in spectacular fashion on Friday, with the 6.75% weekly gain in the all share, the best performance since February 2009.
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 with China.
Heavyweight Naspers led stocks higher, rising 13.29% during the week, while the banking index rose 9.49%.
The JSE’s rebound comes after a cumulative 11% fall in September and October, when most global equities markets were 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.
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. 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 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 ties helped the performance of associate Tencent, as did better-than-expected thirdquarter results from Facebook.
It has been a shocking year for Naspers’s share price and it was about time it went up, said Vestact analyst Paul Theron.
Richemont was also a beneficiary of news that its shares would not be penalised in index rankings, rising 5.63%.
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% in the week, while resources in general performed well.