MARKET WRAP: JSE ends week on upbeat note as US growth surges

The JSE all share ended the week on a positive note on Friday, capping a second consecutive week of gains for the bourse.

The market was supported by strong US GDP data, with its economy growing at the fastest pace in four years. An easing in tension over international trade and a renewed dovish stance from the European Central Bank (ECB) are set to benefit the local market further.

The all share closed 0.74% higher at 57,162.40 points and the top 40 added 0.83%. Resources rose 1.17%, platinums 0.97%, banks 0.81%, financials 0.72% and property 0.67%. The all share was up 0.30% in the week, but is still 3.94% lower for the year.

The tech sector will be closely watched this week as Apple prepares to release quarterly results, following weak numbers from Facebook and Twitter.

A stronger performance by the local market next week will rest mainly on the outcome of a number of economic releases, with some top companies also announcing results.

Higher M3 money supply numbers are expected on Monday, and could support banks and financials. Data has been subdued for most of the year, but the market expects credit growth to edge up to 4.8% in June from May’s 4.56%.

Liberty Holdings closed 1.01% weaker at R116.60 on Friday. It is set to report interims on Thursday, with investors keen to obtain an update following the illegal intrusion into customers’ personal data in June.

Manufacturing purchasing managers index (PMI) data on Wednesday could give an indication on conditions in the sector following a choppy year so far.

International paper and packaging group Mondi will release interims on next Friday. The market is expecting a strong performance after the company reported results that were better than expected in its first-quarter trading update, with underlying profit up 15% year-on-year to €295m. It closed 0.28% lower at R360 on Friday.

The rand is expected to build on its recent strong run against the dollar, having firmed to a three-week best level of R13.09 this week. On Friday afternoon it was at R13.1945 to the dollar from R13.2452 on Thursday, appearing unfazed by strong US GDP growth numbers, while the euro weakened marginally on the news. The rand usually tracks moves in the euro.

Local bonds were firmer with the R186 bid at 8.58% from 8.61%. A firmer rand is bound to support local bonds further.

The top 40 Alsi futures index gained 0.96% to 51,208 points. It ended the week 0.45% higher. The number of contracts traded on Friday was 16,581 from Thursday’s 14,258.