JSE gets good start on Friday, helped by weaker rand

The JSE was off to a positive start on Friday, putting it on track to snap a two-week losing run.

The all share was up 0.62% to 56,625.30 points, outperforming some its counterparts in Europe. The weaker rand environment did the trick, helping mining stocks by softening the effect of weaker commodity prices. Big industrial stocks were also higher on the day.

The rand hovered at about R13.50/$ in midmorning trade, from R13.16/$ at the start of the week, hurt mainly by a strong dollar.

Banks and insurance stocks held up reasonably well, as did retailers, despite the weaker rand environment. The sectors tend to be sensitive to the rand-dollar exchange rate because of its potential effect on inflation and interest rates.

As widely expected, the Reserve Bank left interest rates on hold at 6.5% on Thursday, as its monetary policy committee weighed the effect of rising inflation and a sluggish domestic economic backdrop.

PPS Investments portfolio manager Luigi Marinus said the downward revision in the economic forecast for 2018 was a big surprise.

“This is likely to be viewed as a very disappointing forecast and questions whether we’ve seen the end of the [President Cyril] Ramaphosa euphoria that was widely expressed only a few months ago.”

Europe’s markets were mostly lower in early trade, save for the UK’s FTSE 100, which edged higher. In Asia, China’s Shanghai Composite was the best performer in the region, gaining 2.05%.

Among individual shares on the JSE, British American Tobacco gained 3.89% to R698.60 and luxury goods maker Richemont 1.31% to R116.96.

Gold Fields was up 2.34% to R47.77 and Sibanye-Stillwater 3.38% to R7.34. Lonmin gained 4.45% to R6.80.

Technology group EOH was up 2.52% to R43.87, building on Thursday’s gains of 21%. The rally came after the company appointed a new CEO, Stephen van Coller.