SA stocks strengthen after a week of losses

SOUTH African stocks posted moderate gains on Friday, halting four successive sessions of declines, with the market seeking clues on interest-rate prospects before the Reserve Bank’s monetary policy committee meeting this week.

Gainers included aluminium products maker Hulamin, which added 1.35% to R8.21 after it said it expected interim earnings a share to rise about 95%.

“At the moment it looks like the guys are buying into the dips and the market is consolidating,” said Ferdi Heyneke, portfolio manager at Afrifocus Securities.

The market’s fall in recent days from the record peaks scaled the previous week stems from a number of factors, including technical ones.

Various indicators showed the main indices had strayed into overbought territory, suggesting a correction was on the cards.

But on Friday, the benchmark Top 40 index added 0.29% to 46 071, while the wider All Share index climbed 0.33% to 51 161.

The biggest focus for investors this week will be the central bank’s interest-rate decision.

The market’s rally this year has been fuelled in part by ultra-loose monetary policy globally and domestic rates also near historic lows. Inflation is above the bank’s 3%-6% target band, but a poll of economists pointed to the Reserve Bank waiting until September before raising interest rates.

Major global equities markets steadied, and the yen stabilised against the US dollar as worries about Portugal’s biggest bank eased. However, MSCI’s All World index was still down 1.6% for the week, while the Standard & Poor’s 500 index was on track for its worst week since April.

Portugal’s PSI 20 index was up 1.3% after the country’s largest bank, Banco Espirito Santo, said late on Thursday that loan losses that hit its founding family would not put the bank at risk of running short of capital. Its share price was then down more than 30% since Monday, its worst week on record.

The Dow Jones industrial average was down 0.15% at 16 889.93, and the Standard & Poor’s 500 index was 0.09% lower at 1 962.96. The Nasdaq Composite index was up 0.13% at 4 402.10.

The MSCI World index was down 0.1%, while the pan-European FTSEurofirst 300 index was flat.

Currency markets were largely steady, with the yen trading at ¥101.33 to the dollar and rising 0.12% to ¥137.72 to the euro.

The dollar was little changed against the euro at $1.3593.

Spot gold was at $1 335.90/oz by 1.59pm GMT, up 0.1% but off the previous day’s peak of $1 345, its highest level since mid-March.

Spot silver was down 0.1% at $21.38/oz, spot platinum was 0.1% weaker at $1 507.40/oz and spot palladium was 0.3% softer at $866.30/oz. —