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Johannesburg - South African stocks rebounded on Friday, led by retailers, as worries about global economic growth eased and the main indices booked their biggest daily percentage gain in more than a year.
Investors worldwide have been slashing exposure to equities on mounting concern about the outlook for economic growth. But some reassurance from US and European policymakers, better US data, and a sense bargains might be available after recent sharp declines drew buyers in off the sidelines.
"Markets are bouncing back today all over the globe. It's about time. Some comments from Fed members about extra QE and probably a lack of negative news spurring the gains," Vestact said in a note.
The benchmark JSE Top-40 index rallied 2.2% to 42 735, its biggest daily percentage gain since September last year. The broader All-share index rose 2% to 47 821.
Valuations suggest stocks may fall further. Despite a weak performance this year, the Top-40 index is trading at a price-to-earnings ratio of just over 16, making it the sixth most expensive index among 31 emerging-market stock indices.
Retailers dominated the list of gainers on the benchmark index. Mr Price rising 5% to R203.94 and the Shoprite picking up 3.8% to R134.27.
Sasol, which makes fuel from coal and gas but sells at the same price as companies that refine imported crude oil, rose 3.13% to R557.77 as the price of oil bounced from near four-year lows.
Elsewhere, Merafe slumped 8.85% to R1.03 after the junior industrial metals miner said quarterly output dropped 14%.
Trade was active on Thursday, with 227 million shares changing hands, according to preliminary data, well above last year's daily average of 176 million.
