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Johannesburg - South African stocks closed at their highest point in six months on Friday, as global markets breathe a collective sigh of relief following Europe’s agreement on a plan to deal with the region’s debt crisis.
The Top 40 (Tradeable) [JSE:J200] index of blue chips added 407.33 points, or 1.4%, to end at 29 566.8 points while the broader All Share [JSE:J203] index increased by a similar margin to 32 894.11 points.
South African stocks turned positive for 2011 on Wednesday after their 20-day moving average broke above their 200-day moving average to form a "golden cross” considered by chartists as a buying sign.
Rand rallies
The rand firmed and was on course to record its best week in two years, still benefiting from the eurozone news.
The rand has gained 3.8 percent this week, hitting its 50-day moving average for the first time since early September.
The Top 40 (Tradeable) [JSE:J200] index of blue chips added 407.33 points, or 1.4%, to end at 29 566.8 points while the broader All Share [JSE:J203] index increased by a similar margin to 32 894.11 points.
South African stocks turned positive for 2011 on Wednesday after their 20-day moving average broke above their 200-day moving average to form a "golden cross” considered by chartists as a buying sign.
Rand rallies
The rand firmed and was on course to record its best week in two years, still benefiting from the eurozone news.
Government bonds retreated a bit, taking a breather after this
week’s gains that saw yields -- which move inversely -- fall to multi-week lows.
Focus next week turns to a slew of data, including credit and money
supply numbers on Monday, which will give a clue about whether monetary
conditions are improving enough to point to a sustained recovery in Africa’s
largest economy.
The rand was trading at 7.7031 to the dollar at 1525 GMT, 0.4
percent stronger than Thursday’s New York close of 7.7340.
The rand has come back from 28-month lows of 8.4950 hit in
September but remains vulnerable to developments in the eurozone, a region that
is a major trading partner of South Africa.
“If everything in Europe is sorted out, then the rand should
strengthen. It’s dependent on the euro really,” said Jim Bryson, chief dealer at
Rand Merchant Bank.
The rand has gained 3.8 percent this week, hitting its 50-day moving average for the first time since early September.
