Miners shine as US data disappoints

SINGLE-commodity stocks surged on the JSE on Friday after disappointing US jobs data cast doubts on whether the Federal Reserve would raise interest rates this month.

The US economy added just 38 000 jobs last month, against expectations of between 158 000 and 162 000.

“The softness of these numbers may just be the final straw to push out the rate hike from June to a little later,” said Craig Pheiffer, head of private clients asset management at Absa Wealth and Investment Management.

“The weaker dollar certainly paints that picture. That just creates a bit more uncertainty for markets which were starting to get a much clearer steer on US interest rates.”

The weaker dollar translated into materially higher commodity prices, with platinum and gold prices both rallying up more than 2%.

The moves helped shake gold shares from their recent slumber, with Gold Fields and Harmony Gold each shooting up 9%, while Anglo American Platinum jumped 7%.

The All Share index, which had been choppy for most of the week, finished slightly higher at 54 254.40 points, having ended May with a sizable 2.79% gain.

Apart from the shining resource market, investors also snapped up shares in other sectors, including banks, which rallied for the fourth week in a row.

As the dollar nursed hefty losses, the rand pushed to its best level against the greenback in more than four weeks.

The rand moves were accentuated by S&P Global Ratings’ decision to affirm South Africa’s sovereign credit rating at BBB-.

It hovered at about R15.12/$, its best level since May 4.

Stanlib chief economist Kevin Lings also believed the US central bank would defer the rate hike to later in the year, based on improving data in this second quarter and inflation that was expected to pick up.

In terms of individual shares, Lonmin will return to the JSE Mid Cap index, replacing Sun International, which has been relegated to the Small Cap index.

The changes, which will take effect on June 20, will also lead to Impala Platinum replacing Exxaro Resources in the Resource 10 index.

Mr Price topped the gainers’ list in the Top 40 index as the market reacted favourably to its full-year results. The share price shot up 13% to R209.