Financial stocks flipped the South African bourse to a positive close on Friday, as the rand climbed to its strongest level against the dollar this year but gains were capped as a rally in the US fizzled out.
The all-share index closed 0,2% or 16,59 points higher at 9,697.44 points, off an intraday high of 9,770.3. The value of trades was about R2,17-billion.
Standard Bank put on 2,5% or 80c to close at R33, while financial services firm Old Mutual notched up 1,9% or 25c to R13,65.
”The banks had quite a pop, that was where the market’s strength came from,” said Daniel Spoormaker of Consilium Capital.
Absa bucked the trend, as investors took a cautious view of the bank stock ahead of the company’s results to the end of September on Monday. It closed 1,14% or 40 cents lower at R34,60.
Interest-rate sensitive stocks like banks and retail issues have been hammered in past months on a weak rand, which has contributed to the Reserve Bank’s decision to hike interest rates four times this year.
The rand bust through resistance levels on Friday, climbing to its strongest levels against the dollar this year, as banks flocked to join a groundswell of positive economic sentiment, traders said.
At 1500 GMT, the rand was trading at 9,6 to the dollar, compared to 9,775 at the close on Thursday.
After a brief dip at the open, luxury-goods firm Richemont shrugged off the stronger rand and trotted higher on Friday, building on Thursday’s hefty gains. It had added 2,7% or 46c to R17,66 by the close.
The Swiss-based group leapt 9,9% on Thursday after reporting a decline in earnings that were not as steep as expected.
Dual-listed stocks like Richemont, which makes its earnings in foreign currency, tend to lose out when the rand strengthens.
Synthetic fuels firm Sasol gave up 1,8% or 190c to R105, as oil prices held steady on hopes that a possible attack on Iraq could be delayed or avoided after Iraq accepted a UN resolution on disarmament.
Gold continued its slow recovery on Friday, after having dropped sharply two days ago when Iraq accepted UN arms inspectors.
Spot gold was trading at $318.75/9.25 at 1500 GMT, up from Thursday’s New York close of $317.80/318.30.
AngloGold pared its early losses, and closed 0,8% or 470 cents lower at R557,80. Its less hedged peer Gold Fields added 1,6% or 175c to close at R110. – Reuters