JSE books 4% as it rides out volatility

SOUTH African markets finished an action-packed week mixed, with the JSE holding up decently while the rand traded in a wide range against major currencies.

The All Share index settled 4% stronger at 53 824.30 points on a week that was dominated by global central banks and political drama at home.

Investors generally cheered after the US Federal Reserve downgraded interest hike expectations this year, citing a fragile US economy, among other factors.

The Fed’s stance weighed on the dollar but boosted emerging markets such as South Africa, where interest rates are rela- tively high. The pick-up in interest towards the emerging world helped financial and industrial stocks, which have so far this year trailed the resources sector on the JSE.

Momentum SP Reid Securities said the short-term strength in the All Share index represented “an ideal opportunity to trim back trading exposure” because of a weak macroeconomic environment.

Media and internet group Naspers and financial services group Sanlam each notched up 12% to lead the Top 40 index.

At the other end of the spectrum, Gold Fields and African Rainbow Minerals were notable losers.

Gold Fields dropped as much as 15% to R15.05 on Friday after the company said it had raised R2.3-billion to pay down its debt.

In the currency markets, the rand battled to find clear direction, swinging from R16.24/$ to R15.06/$.

The weaker dollar and a 25 basis point hike in local interest rates helped the rand, which was at R15.28/$ in late trade on Friday.

With a shorter week, the rand will most likely take its lead from the release of local inflation data on Wednesday.

The consumer price index, which motivated the Reserve Bank to raise rates, is expected to stay above the 3% to 6% target range this year. In January, it sat at 6.2% year on year, driven in part by the drought.