JSE higher in relief rally as general retailers jump

THE JSE all-share closed firmer in a relief rally yesterday, with general retailers leading the way.

The gold index, however, retreated more than 4% ahead of a probable US rate hike next week.

Trading was choppy as the market sought direction from the S&P Global Ratings report on Friday, and Italian voters’ decision on Sunday to reject constitutional reform plans, raising questions about Italy’s continued EU membership.

S&P lowered South Africa’s long-term currency rating to BBB from BBB Plus, while the foreign currency rating was left unchanged at BBB Minus, both with a negative outlook.

“South Africans can head into the festive season knowing that the country has maintained its investment grade rating,” Old Mutual’s Dave Mohr said. Looking to next year, he said the bigger risk to domestic bond markets remained US interest rate developments.

“Higher US rates would likely result in a stronger dollar, which could result in a weaker rand, putting upward pressure on South African inflation and interest rates,” Mohr said.

A firmer rand was the main driving force yesterday, supporting retailers and banks. The allshare closed 0.93% higher at 49 713.6 points and the blue-chip Top 40 added 0.86%.

General retailers lifted 3.23% and food and drug stores 2.95%.

Banks added 1.95% and financial stocks 1.06%.

Platinum stock rose 0.94%, but the gold index slumped 4.46%.

Kumba Iron Ore jumped 6.01% to R167.50. Barloworld rose 4.15% to R109.99.