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Strong rand puts damper on JSE rally

Johannesburg - The strong rand put a damper on price movements on the JSE on Friday and the major indices were only moderately higher, despite good news about the global and South African economies.

Earlier in the week positive news about US economic growth and expanding factory production in China gave resources shares a boost, as industrial metal prices are rallying. However, the mood turned more cautious on Friday as financial markets looked to the US jobs report due later in the day for further clues on the state of the world’s largest economy.

This report is also the last one before the Federal Reserve’s next policy meeting, so the figures will also give a good indication of future interest rate movements.

The rand improved strongly on Thursday afternoon and held those levels on Friday, after the South African Reserve Bank announced the country's sixth consecutive trade surplus. Producer price inflation is also at the lowest level in two years.

READ: Improved global demand boosts SA trade

At mid-morning the local unit traded at R13.94 to the dollar, which means the dual-listed companies in the industrial and resources sectors earn less in rand for their exports.

The resources sector, which made a strong run on Thursday, was only 0.29% higher while the Gold index lost 0.03% despite the stronger gold price, which rose 0.80% to $1 319.52. The Industrial index was 0.03% lower and the Financial index 0.22% down.

The result was that the All-share index was only 0.01% higher at 56 525 points at mid-morning, but this is not far below the all-time high of 56 656 points. The Top 40 index was 0.04% higher at 50 105 points, also just below the all-time high of 50 175 points.

Economists polled by Reuters expect US nonfarm payrolls to increase by 180 000 jobs in August after surging to 209 000 in July, and average hourly earnings to increase 0.2% after rising 0.3% in July.

The top resources shares edged higher again on Friday, but the gains were much more modest than on Thursday. Anglo American [JSE:AGL] was 0.77% higher on a new 52-week high of R236.88 and Glencore [JSE:GLN] was 0.53% stronger on a 52-week high of R60.84. BHP [JSE:BIL] gained 0.50% to R248.19, not far from the 52-week high of R249.19.

The platinum price firmed 0.67% to $995.61, but platinum shares did not move much as a response to the stronger rand. Anglo American Platinum [JSE:AMS] was 0.43% softer at R350.98 and Impala [JSE:IMP] lost 0.10% to trade at R40.16.

FirstRand [JSE:FSR] was the only one of the top four banks to trade higher and it gained 0.43% to R55.71. Nedbank [JSE:NED] was 1.74% lower at R216.05, Barclays Africa [JSE:BGA] lost 0.32% to R147.90 and Standard Bank [JSE:SBK] gave up 0.25% to R167.01.

Capitec [JSE:CPI] is however again at record levels, gaining 0.05% to trade at an all-time week high of R900.07.

Steinhoff [JSE:SHF] traded 1.08% lower at R62.18 despite a 48% jump in nine-month sales on Thursday, helped by acquisitions and growth in its European and African operations.

Most of the attention among the retailers was on Mr Price [JSE:MRP], which traded 4.39% higher on a new 52-week high of R189.20 after a strong retail report. The company said retail sales grew 6.2% to R6.5bn in the first four months of the year.

The previous year’s underperformers, MRP Apparel and Milady, became stars with sales growth of 10% - far better than the numbers of of similar stores.

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Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.1%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,220.00
+1.2%
Silver
24.86
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
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