Global markets boosted by Fed’s delay in hiking rates
The JSE had a negative March but a relatively better month than some global markets, dropping 2,18% compared to a 4,3% fall in India and a 2,5% drop in the FTSE 100 over the period. The Dow Jones industrial average was 1,97% lower in the month, and 0,26% down since the beginning of the year.
The S&P 500 edged up 0,44% over the year, but was 1,74% lower over the month as American markets apprehensively eyed first quarter earnings. The high average valuations of US equity markets will have to be justified by company earnings, which are already under pressure from the stronger dollar.
The JSE was mainly supported by industrials, with the Indi 25 up 6,2% since the beginning of the year but losing some traction in March.
Naspers hit record highs in March, gaining 23,4% in the month, and rand hedges benefited from the weaker rand, but diversified conglomerate Remgro dragged the index down, losing 4,04% in March.
The Fini 25 index ended the month 1,60% higher and is 9,8% up for the year.
The main reason for the rise in global markets has been the US Fed’s extension of the date for the envisaged interest rate hike cycle to commence.
The market first pencilled in June for the move, but now the consensus date is September.
Emerging market sentiment was supported by further stimulatory measures announced in Europe by the European Central Bank, and in China.
In Asia, the Shanghai stock exchange was the star performer, climbing 14,7% in the month. The index is 17,7% up so far this year. The Hong Kong Hang Seng added 0,97% in March and is 6,18% up on the year.
Among individual shares on the JSE, resources were the dogs and banks the stars.
High-flying smaller bank Capitec ended the month 28,1% up. Standard Bank rose 17,09%.
It was another bad month for the rand. The local currency weakened 3,5% against the dollar, which stabilised against the euro but is still 6,8% stronger against the European currency so far this year. Commodity prices continued to weaken, with platinum dropping 3,93% and gold falling 2,11%. Little support for Brent crude prices was evident in the month, as the price fell 11,2% after recovering from six-year lows in February.