JSE ends strongly as miners stage rally

THE JSE ended a rather subdued week with a bang on Friday as diversified miners resumed their recent rally, thanks to high commodity prices.

The iron-ore price touched the $86-a-ton level for the first time since 2014, and copper flirted with the $6 000-a-ton level, a price not seen since June 2015.

The rally in commodity markets coincided with upbeat data in China, the biggest consumer of resources.

Imports in the second-largest economy rose 16.7% in dollar terms in January year on year, beating market forecasts, versus 3.1% growth in December.

But Capital Economics analysts were cautious in their outlook on industrial metals in particular, saying prices had now gone ahead of fundamentals. “This is particularly the case as we expect the Chinese economy to slow over the course of this year in the absence of additional stimulus. What’s more, we suspect that Mr [Donald] Trump will struggle to push through his ambitious infrastructure spending plans.”

“Trump trade” was reflected in US stock prices on Friday as the Dow Jones industrial average hit a fresh intraday record high after the US president promised to announce corporate tax reforms.

On the JSE, banking stocks fared particularly well, as did the retailers and broader industrial stocks.

The gains left the all share up 1.51% to 52 687.30 points, with the top 40 gaining 1.65%, its best percentage gain since early January.

Gold and platinum stocks bucked the trend due to weak precious-metal prices.

The rand strengthened to highs of R13.30/$ before losing ground in late trade as the dollar gathered momentum.