SA bourse rallies on global markets

SOUTH African markets staged a comeback this week, taking their lead from higher global markets.

The All Share index rallied 3% to 53 039.90 points, ending a three-week losing run.

Resource stocks once again led the charge, boosted by a pick-up in commodity prices.

The resource index, which includes Anglo American and BHP Billiton, has rebounded 31% from its lows on January 30 but is still significantly below its record peak reached in 2008.

Brent crude pushed to highs of $44 a barrel, which was the best level since December, before edging back to $42 a barrel on Friday.

Major oil producers, including Saudi Arabia and Russia, are meeting in Doha, Qatar, today in an attempt to boost prices by freezing production.

But Nedbank Corporate and Investment Bank analysts expect the oil price to remain range-bound in the longer term, given the higher global supply and weak demand.

Banks and industrial stocks, which have struggled to gain traction of late, held up decently this week.

In the currency markets, the rand pushed to its best level to the dollar since December, helped by weak US retail sales and consumer prices data.

The data suggested that the US Federal Reserve would err on the side of caution to raise interest rates. The rand rallied to highs of R14.44/$ before pulling back to R14.60 late on Friday.

“The mighty rand is something to behold of late while most emerging-market currencies struggled to make any meaningful gains against the dollar earlier this week,” said TreasuryOne dealer Phillip Pearce.

If sustained, the stronger rand will help ease domestic inflation, which has nudged outside the Reserve Bank’s upper limit of 6%.

In this regard, the release of local consumer inflation figures on Wednesday will grab attention as markets wait to see if the central bank will further raise interest rates.