Johannesburg - The rampant dollar, which had its best week this year, took a breather on Friday and emerging markets all over the world, including the JSE, responded with a relief rally.
With Asian markets higher and European markets also opening stronger, the dual-listed shares on the JSE responded strongly and the Industrial index, which includes most of these shares, was almost 1% higher at mid-morning.
The dual-listed shares in the index followed their counterparts on the international markets higher, with big capitalisation shares such as Naspers, British American Tobacco and Steinhoff all trading all up.
Resources shares were also higher, with the dollar stabilising as the stronger greenback put commodity prices under pressure.
By mid-morning the All-share index was already 0.73% higher at 55 394 points, with the Top 40 index gaining 0.75% to 49 209 points. The Industrial index was 0.93% higher, the Financial index traded 0.46% stronger and the Resources index was 0.60% up. The Gold index jumped 1.32% in reponse to a slightly higher gold price, as the dollar fell back somewhat.
Dollar strength earlier this week was caused by indications that US interest rates might be hiked again this year, which pushed US treasury yields to the highest level in nine years. The US unit was also supported by President Donald Trump’s proposals to cut US taxes, although those plans might meet stiff resistance in Congress.
Higher US yields might lead to a reversal of the strong flow of investments to emerging bond markets, including South Africa, back to the United States.
The rand, which traded as low as R13.70 on Thursday, was back at R13.51 to the dollar at mid-morning, but analysts said the local currency may weaken again. Future movements of the rand, as well as share prices, are currently not the result of what is happening in South Africa, but depends on events in the United States.
Naspers [JSE:NPN], the biggest share on the JSE, at mid-morning was 1.73% stronger at R2 914.50. The share was also supported by its Chinese internet subsidiary Tencent, which is listed on the Hong Kong market and also rallied in line with emerging markets. Tencent traded 0.97% stronger at HK$336.20.
Richemont [JSE:CFR] set yet another 52-week high, gaining 0.21% to R121.68. Before Friday's trade Richemont was 7.5% stronger over the past 30 days. British American Tobacco [JSE:BTI] gained 0.36% to R846.00.
Steinhoff [JSE:SHF], which at one stage traded at a 52-week low on Thursday, recovered strongly on Friday and lifted 0.96% to R59.85. Steinhoff Retail Africa [JSE:SRR], which was listed last week, gained 0.79% to R21.67 and earlier traded at an intraday all-time high of R21.89.
Anglo American [JSE:AGL] was on a new intraday 52-week high of R240.68 in early trade , but could not maintain the momentum and at mid-morning was 0.64% stronger at R237.95. BHP [JSE:BIL] was 0.41% higher at R237.50 and Glencore [JSE:GLN] gained 0.60% to R61.63. South32 [JSE:S32] was again on a new high of R34.66 after it firmed 2.03% in morning trade.
Impala’s [JSE:IMP] woes continued however and at mid-morning the share was 1.70% weaker on another low of R31.25. Before Friday’s trade the share was already more than 27% lower over the previous 90 days and more than 16% over the past 30 days.
Some financial shares, including Sanlam [JSE:SLM] and Old Mutual [JSE:OML], made welcome recoveries after they were under pressure lately and lost more than 2.5% over the previous seven days. Sanlam traded 1.22% higher at R67.28 and Old Mutual was 1.07 stronger at R34.87.
FirstRand [JSE:FSR] was 0.33% stronger at R52.00.