The JSE added to the previous session’s gains on Friday, on hopes that prospects of cooling inflation in the US will prompt the Federal Reserve to ease up on its aggressive tightening.
Also helping sentiment on the day is the news that China’s zero-Covid policy, which has weighed on business and economic growth, is getting a little looser. China reduced its quarantine time for international visitors by two days, while also limiting contact tracing only to close contact with people who are infected with the virus.
“Today it’s the improvement in economic sentiment on the back of that inflation data alongside a modest relaxation of Chinese quarantine measures that are lifting prices,” said Oanda senior market analyst Craig Erlam.
“That inflation report has been some time coming and investors breathed an enormous sigh of relief in response. The reaction to the number looks a little extreme, overdone even, but in fairness, investors have waited a long time for the chance to do that and so much negativity has been priced in during that time,” said Erlam.
“We could see sentiment cool again in the coming weeks once the dust settles and the narrative changes from ‘inflation has peaked and the Fed will slow its tightening efforts’ to ‘we need more supportive data to back this up’. But this is a fantastic start.”
The JSE all share rose 3.21% to 72,982 points and the top 40 3.69%. Industrial metals jumped 6.32%, industrials 4.59%, resources 4.05% and precious metals 1.4%.
The local bourse gained 5.31% for the week, supported by the week’s gains in precious metals, industrial metals and resources, each jumping 10.77%, 8.84% and 8.63%, respectively.
At 5.55pm, the Dow Jones industrial average was little changed at 33,446 points, while in Europe, London’s FTSE 100 lost 0.76%, while France’s CAC 40 gained 40 0.58% and Germany’s DAX 0.56%.
Shares in luxury goods group Richemont soared 12.83% to R214.33 — their biggest one-day gain in 21 years — after the company flagged strong growth and earnings, helped by its jewellery businesses.
The company also said in a trading statement on Friday that China easing some of the Covid-19 restrictions so far added to an optimistic market reception.
The rand extended Thursday’s gains, trading below R17.30/$ for the first time in two months. At 6.17pm, it had strengthened 0.49% to R17.2746/$, while it had weakened 0.83% to R17.8349/€ and 0.39% to R20.3786/£. The euro was 1.35% firmer at $1.0333.
Gold gained 0.53% to $1,763.34/oz, while platinum lost 0.65% to $1,031.30/oz. Brent crude rose 2.87% to $95.99 a barrel.
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