The JSE ended higher on Friday, snapping a four-day losing streak that had pushed the all share index to the lowest level since mid-March.
Resource stocks did the heaving lifting thanks to broadly higher commodity prices. Palladium was the standout performer after rising as much as 11% on renewed supply concerns before pulling back slightly to trade 8.4% higher at $2,430/oz at 6.39pm on Friday.
Russia produces about 40% of the world’s palladium, which is used to clean the emissions of internal combustion engines.
As a result, JSE-listed platinum group metal shares surged, with Impala Platinum jumping nearly 10% to R231 to mark its biggest one-day gain since the start of the Russia-Ukraine war on February 24. Sibanye-Stillwater rallied 8.32% to R63. Palladium is extracted as a byproduct in the mining of other metals, usually platinum and nickel.
The big diversified resource counters such as Anglo American were also higher, ending four days of hefty losses as the war in Ukraine dragged on, with no end in sight.
Brent crude was marginally lower at $100 per barrel, having fallen nearly 7% this week, which could alleviate pressure on fuel prices that are at record highs. But Sasol bucked the trend on the day, with its share price gaining 3.22% to R371.30.
The all share index ended 1.04% higher at 74,776 points and the top 40 rose 1.11%, as the resource index recovered 3.76% and the precious metals and mining stocks index surged 4.87%.
Overall, the local share market has held up well relative to its peers since Russia’s invasion of Ukraine started, with banks in particular hitting record highs in the first quarter.
“Markets seem to have priced in a long drawn out affair in Ukraine and barring escalation volatility should moderate,” said Greg Katzenellenbogen, portfolio manager at Sanlam Private Wealth.
“Going forward markets seem to be pricing in a sharp rise in commodity prices driven in part by sanctions on Russia and the realisation that Europe will have to spend hundreds of billions trying to wean themselves off dependency on Russian gas and oil by throwing money at renewable energy.”
However, the war has also had a significant impact on paper and packaging group Mondi, whose market value slumped by 31% since February 24, wiping off billions of rand in shareholder capital. The Russian business generates 12% of group revenue and contributed about 20% to its core profit. Mondi shares finished 2.84% lower at R270.14 on the JSE on Friday.
The rand held its own against the dollar despite a surge in US Treasury yields that supported the US unit amid expectations of aggressive increases in interest rates by the US Federal Reserve.
The rand was 0.68% firmer at R14.6278/$ by 6.39pm, having rising by 8% so far in 2022.
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