JSE opens higher, but emerging-market sentiment remains fragile

The JSE opened firmer on Friday in broad-based gains after the rand recovered on a weaker dollar, boosting banks and retailers.

Retailers and banks led at the opening, with industrials also higher ahead of the release of Naspers’s annual results to end-March later in the day.

The all share was heavily sold off earlier in the week and is heading for a negative weekly showing.

The dollar lost ground on disappointing US data, with the Dow closing weaker for the eight consecutive session as technology and media shares gave up the previous day’s gains.

After the Dow’s close, the US Federal Reserve released the results of its stress tests results, which included six foreign banks for the first time. All major banks passed the tests.

Conditions for emerging markets appear less sanguine ahead of the Turkish election at the weekend, with indications that overall emerging-market growth is likely to slow later in the year.

Capital Economics analysts said headwinds to the macroeconomic outlook for emerging markets were starting to build up. This was despite latest hard activity figures suggesting that growth held up well going into the second quarter.

“However, the most recent trade figures show that emerging market export growth was slowing even before fears of a trade war between the US and China increased this month,” they said.

Data released by the Reserve Bank on Thursday showed that the current account deficit widened to 4.8% of GDP in the first quarter, the highest level since the 5% recorded in the first quarter of 2016, as weak exports pushed the trade account into deficit.

The Dow closed 0.8% lower on Thursday. Market focus will be on the opening trade later in the day, amid indications the Dow could record the second consecutive week of losses.

The Nikkei 225 was down 0.78% on Friday and the Hang Seng added 0.27%.

Brent crude recovered 1.24% to $73.84 a barrel amid disagreements at oil cartel Opec’s Vienna meeting. Iran walked out of preliminary discussions in disagreement with plans to increase production, which is expected to put downward pressure on prices.

At 10am the all share was 0.88% higher at 56,729.80 points and the top 40 added 0.86%. Food and drug retailers rose 1.36%, general retailers 1.32%, banks 1.2%, industrials 1.14% and financials 0.98%.

Sasol slipped 0.26% to R469.62.

Remgro gained 1.11% to R203.25.

FirstRand rose 1.77% to R60.91 and Nedbank 1.37% to R258.21.

Steinhoff added 2.46% to R1.25. It said in an announcement that its negotiations to sell Austrian furniture chain Kika-Leiner to Signa were near conclusion.

Dis-Chem was up 1.7% to R26.95 amid reports that directors of the group were hedging exposure to their own shares.

Growthpoint rose 0.89% to R25.93.

Vodacom climbed 2.31% to R126.

Naspers was up 1.52% to R3,256.57.