Miners pushed the JSE all-share index 5% higher on Friday — its biggest one-day gain since March 2020 — while the rand strengthened 2.1% as global markets rallied on prospects that China’s economy looks set for a growth spurt.
Bloomberg reported on Friday that the world’s second-largest economy is working on a plan to end a system that banned individual flights for bringing in passengers infected with the Covid-19 virus.
Commodities rallied across the board — boosting the rand — while the mining and metals index helped thelocal bourse to close sharply stronger. China is SA’s biggest trade partner for commodities.
“Mining stocks and metals producers led the overall market higher on speculation China may be planning to remove some Covid-Zero restrictions, which would boost China’s economic growth and industrial metals demand,” said FXTM senior research analyst Lukman Otunuga.The JSE all share rose 4.93% to 69,305 points , while the top 40 added 5.16%. The industrial metals and mining index surged 9.81%, resources jumped 9.25%, the precious metals and mining index collected 8.03% and industrials 4.14%.
Meanwhile, investors are digesting the US nonfarm payrolls data and what it means for the pace of future interest rate hikes by the Federal Reserve.
The report showed the country’s employment market remained strong, with 261,000 jobs added in October — more than the market expectation of 200,000. However, the unemployment rate came in at 3.7%, slightly above the expected 3.5%. Anything less than 4% is generally considered to be full employment.
“Friday’s jobs print is a mixed picture, given the rise in both unemployment and jobs. But there are signs that the labour market will continue to cool down without the economy collapsing,” said Oanda senior market analyst Edward Moya. “The service sector hiring for one has some cracks, and that should weaken going forward.”
“This labour report allows Fed chair Jerome Powell to stick to the hawkish script for a while and still support the idea of a downshift in tightening for the next policy meeting,” said Moya. “Unless next week’s inflation report is a scorcher, the Fed will opt for a slower pace of rate increases.”
At 6.15pm, the Dow Jones industrial average had risen 0.3% while London’s FTSE 100 added 2.4%, France’s CAC 40 2.8% and Germany’s DAX 2.52%. Earlier in Asia, Hong Kong’s Hang Seng jumped more than 5%.
The rand gained the most in more than two months and by 5.29pm it had strengthened 2.1% to R18.0113/$, 0.59% to R17.8292/€ and 1.06% to R20.3273/£. The euro gained 1.59% $0.99.
Gold rose 2.61% to $1,671.44/oz and platinum jumped 3.61% to $948/oz. Brent crude added 3.41% to $97.76 a barrel.
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