February ends on seven-month high

SOUTH African stocks ended higher on Friday, led by insurer Old Mutual, which announced robust sales.

The main index finished the month with its biggest monthly gain in seven months.

Old Mutual jumped 5.5% to R35.21 after it said its 17% rise in annual sales demonstrated strong underlying growth despite currency swings wiping out the bottom line.

Overall, the exchange wrapped up the month — in which the main index hit several record highs — with a 5% gain, the biggest monthly rise since last July.

“Too much fear breeds opportunities,” said Owen Nkomo, executive partner at Inkunzi Investments. “The big sell-off caught some people short, and they are forced buyers now.”

Stocks fell sharply at the beginning of the year in a flight from emerging markets after the US Federal Reserve announced the tapering of its bond-buying programme.

The JSE Top 40 index on Friday added half a percent to 42 771.61, and the broader All Share index was 0.59% higher at 47 328.92.

Naspers, the bourse’s most valuable stock, fell 0.8, but remained among the top climbers so far this year on the strong growth of its Chinese moneyspinner Tencent Holdings.

Stocks on Wall Street zoomed to a record high, shrugging off a revised downward estimate of US growth, while the euro hit its highest level this year after inflation in Europe stabilised, cooling expectations of looser monetary policy.

The benchmark Standard & Poor’s 500 stock index surged to an intraday record after a round of mostly positive economic data.

However, a discouraging read on US gross domestic product cast doubt on whether higher equity valuations are justified.

MSCI’s all-country world equity index rose 0.48%, while stocks in Europe rebounded on the relatively stronger US data.

European shares initially dipped as eurozone inflation data came in at 0.8%, a 10th of a percentage point above expectations, lessening the prospect of new monetary stimulus measures from the European Central Bank.

The pan-European FTSEurofirst 300 index subsequently edged up 0.04% to 1 345.99.

The Dow Jones industrial average rose 0.51% to 16 356.36, and the Standard & Poor’s 500 Index was up 9.24 points at 1 863.53. The Nasdaq Composite Index was up 0.27% at 4 330.66.

Oil had dropped below $109 a barrel as revised US GDP estimates curbed the demand outlook. But crude prices rebounded on the stronger US data. Brent crude rose 7c to $109.03 a barrel.

Spot gold was down 0.1% at $1 329.58/oz, below a four-month high of $1 345.35 struck on Wednesday. Silver rose 0.2% to $21.28/oz, platinum was up 0.4% to $1 450.00/oz and palladium gained 0.5% at $742.25/oz. —