Fed’s reassurance lifts stocks to two-year high

SOUTH African stocks booked their biggest weekly gains in nearly two years on Friday after news that the US Federal Reserve will maintain its monetary stimulus. The JSE Top 40 index rose 0.4% to 36 227, logging a 4.4% gain for the week — its biggest since late 2011. The All Share index was up 0.47% to 40 735.

Boosted by rising oil prices, Sasol rose 2.21% to R448.72.

Decliners were led by resource stocks including Anglo American Platinum, which fell 3.05% to R195.34. AngloGold Ashanti shed 2.28% to R127.50. Sibanye Gold shares fell 4% to R8.16. But it was not the biggest loser among the gold stocks, with smaller rival GoldOne shedding 4.29% to R1.34.

Nearly 124 million shares changed hands. Advancers outnumbered decliners at 180 to 109, with 61 stocks unchanged.

World stock indexes were little changed on Friday, pausing after recent sharp gains as investors’ focus shifted to US corporate earnings while the dollar bounced from a steep sell-off. Gold fell as the dollar rebounded and investors booked profit after four days of gains.

US stocks were flat, a day after the Dow Jones industrial average and S&P 500 hit all-time closing highs. The focus turned to earnings from top US banks including JP Morgan and Wells Fargo, both of which reported higher-than-expected profits.

European shares edged up as investors’ concerns about slowing growth in China diminished after China’s finance minister doused hopes of fresh stimulus and said growth of below 7% was acceptable for Beijing.

Stocks, bonds and commodities have rallied this week on hints from the Fed that the US central bank was unlikely to phase out its stimulative bond buying before the unemployment rate improved.

The FTSEurofirst 300 was down 0.1%. The MSCI world index was up just 0.02%, but was on track to post its best week since January.