JSE closes in red despite platinums firming

THE JSE ended a volatile week in the red on Friday as firmer platinum stocks failed to support broader market sentiment, with property stocks retreating on profit-taking.

The All Share index ended the day 0.38% lower at 52 551 but was still 2.5% firmer for the week, the best weekly performance in two months. Rand hedges firmed despite a firmer rand holding up at levels below R12.80/$ after gaining 3% against the dollar on Thursday. AB InBev gained 1.87% to R1 429, and British American Tobacco rose 0.52% to R814.21. Among property stocks, Growthpoint was 2.73% lower at R27.40, but Liberty Two Degrees jumped 4.75% to R10.58.

The main market driver remained the slightly dovish outlook painted by the US Federal Reserve after it hiked US interest rates earlier in the week, only the third time since December 2015.

The outlook caught the market off guard, as rising inflationary pressure and subdued retail sales data in the US seemingly created an environment for more aggressive rate hikes. However, the Fed made it clear there were too many uncertainties for this policy to be followed at present.

“With the surge in global equities, you’d think the market believed the Fed cut rates on Wednesday,” said Treasury One trader Phillip Pearce.

The market seems comfortable with the possibility of two more US rates rises this year, although the Dow Jones has slipped off levels above 21 000, reached after President Donald Trump’s “presidential” speech before Congress earlier in the month.