The JSE capped its best week in two months on Friday, boosted by a global equity rally earlier in the week.
Dovish comments from US Federal Reserve chair Jerome Powell overnight, as well as news of high-level talks between the US and China later in January, bolstered sentiment.
On Friday, the all share climbed 0.72% to 53,653.4 points and the top 40 0.69%. Food and drug retailers gained 1.41%, industrials 0.9% and general retailers 0.89%. The all share gained 2.78% for the week.
Retailers, which are interest rate-sensitive, fared best on the day, ahead of the first meeting of the Reserve Bank’s monetary policy committee (MPC) for 2019. The sector came under pressure in 2018 as consumers faced headwinds from steep fuel-price increases and the first VAT hike in two decades.
While interest rates are expected to remain unchanged at 6.75%, close attention will be paid to governor Lesetja Kganyago’s comments about the Fed’s stance.
The Brexit vote on Tuesday could spark volatility in the market. The current deal is widely expected to be rejected, which could prompt a no-confidence vote in the government in the coming weeks and increase pressure for a second referendum, Oanda senior market analyst Craig Erlam said.
Local equities with a significant UK presence, such as Capital & Counties and Famous Brands, may be in for a volatile week with some analysts saying the pound could see large swings.
“Brexit has basically ground all business activity to a halt as markets await some resolution of the issue before committing any investment capital,” FX Strategy MD at BK Asset Management Boris Schlossberg said. The collapse in economic activity could worsen if no deal is reached.
Local data in the coming week will include retail sales and mining production figures, which will provide insight into how the economy fared in the fourth quarter.
AB InBev added 3.78% to R1,004.57, after Bloomberg reported it is considering separately listing its Asian operations.
Rand hedge Richemont rose 1.25% to R94.68 having said earlier that sales in its third quarter to end-December rose 24% compared with the prior period, at constant exchange rates.
Naspers gained 1.04% to R2,984.75.
Trading ex dividend Sappi fell 1.43% to R75.60.
Atlantic Leaf lost 0.61% to R16.40. It said after the market closed on Friday that net asset value per share for the nine months to end-November had fallen to £1.04 from the prior period’s £1.05.
Shortly after the JSE closed, the Dow was down 0.65% at 23,851.94 while in Europe, the FTSE 100 had fallen 0.38%, the CAC 40 0.7% and the DAX 30 0.66%.
At the same time, gold had added 0.19% to $1,288.79/oz while platinum had fallen 0.61% to $816.14/oz. Brent crude had lost 0.98% to $60.67 a barrel.