Mining stocks remain the favoured flavour

After gaining 5.74% in March, the JSE all share index slumped in April, recording paltry growth of 1.35% in the month as industrials took a breather.

Naspers dropped 5.2% in the month and SABMiller was down 3.15%. Richemont shed 2.9%.

Mining stocks remained the flavour of the month. The resources 10 index climbed 12.5%. At end-April the index was up 26.8% over the year as gold and platinum prices continued to rally.

At month-end the gold price was up an annual 21.7% to just under US$1,300/fine ounce. It crossed the crucial $1,300 level in May but could not hold on as the market awaited direction from the US Federal Reserve on the future interest rate path.

The local gold index continued its shining path, but its 5.4% growth in April was somewhat subdued after the index rocketed nearly 50% in February. At the middle of May the index was still 110% higher for the year.

The platinum price was not far behind, climbing an annual 20.9% to above the $1,000 level in April. The platinum index was up 103% in 2016 at the end of April after climbing a further 21% in the month.

Global currencies remained jittery, with uncertainty around whether the Fed will hike rates at four times this year, as previously stated, or only a further two. Part of this uncertainty was reflected in US equity markets, with the Dow Jones industrial average ending April flat (+0.05%).

Global markets were also weaker to mixed amid a lack of clear pointers on growth. The FTSE 100, the Paris CAC 40 and the German Dax all remained in negative territory on an annual basis at the month end.

The dollar plunge against the yen last month reflected the reality that global markets were still hooked on further stimulus lifelines from central banks against a backdrop of lower global growth projections.

At end-April the dollar had weakened 11.8% against the yen after the Bank of Japan refrained from further stimulus announcements that the market had expected. The greenback stood relatively firm against the euro in choppy trade.

The rand stabilised in April, but trade remained volatile, with the local currency losing 7.7% to the greenback since the beginning of January.

A clear view was that the oil price was oversold after falling to $29/bbl in February. Brent crude rose 18% to $45 in April, but market players were sceptical that the price jump could be justified on fundamentals. That would depend on production cuts in oil-producing countries, which seems unlikely.