THE JSE closed firmer on Friday in global risk-on trade following a sharp rise in oil prices.
The all share was flat for most of the day as the market looked for direction which came in the late afternoon on stronger European markets and a firmer opening on Wall Street.
By the JSE’s close the price of Brent crude was up 5.44% at $41.74 a barrel, its highest level since mid-March.
Investor sentiment swung back in favour of riskier assets, buoyed by rising oil prices, a weaker Japanese yen and reassurances from Federal Reserve chairwoman Janet Yellen about the strength of the US economy, Dow Jones Newswires reported.
Comments from Japan’s finance minister Taro Aso that he may act against “one-sided” yen increases helped pushed down the value of the yen against the dollar after it surged on Thursday, raising concerns about the world’s third-largest economy, the effectiveness of central bank policies and, by extension, global growth prospects.
In a speech late on Thursday, Ms Yellen strove to ease economic anxieties, saying the US economy was “on a solid course” and was “not a bubble economy”. That helped push up oil prices, which in turn bolstered investors’ risk appetite, analysts said.
She was further supported by US Federal open market committee (FOMC) members on Friday who in public reaffirmed the “cautious” stance expressed after last month’s Fed meeting, in which rates were kept unchanged.
At 5pm the all share closed 0.54% higher at 51,424.50 points and the blue-chip top 40 had risen 0.51%. Banks gained 2.85% and financials firmed 1.33%. Platinums rose 1.31% and resources added 1.02%. South African listed property was up 0.53%, while the gold index lost 1.81%.
The all share ended the week down 0.31%, its third consecutive week of losses. It is up a marginal 1.44% for the year.
The Dow Jones industrial average was 0.80% firmer soon after its opening. The FTSE 100 was up 1.11%, the Paris CAC had gained 1.50% and Germany’s Dax was 1.20% higher.
The JSE also benefited from improved sentiment towards emerging markets. Capital Economics economist Neil Shearing said the sense of crisis that had been building in emerging markets had started to ease over the past month.
While a handful of emerging markets, such as Brazil and Russia had remained mired in recession, China had been stable. “There is no evidence of the hard landing that many fear,” he said.
He said recessions were not a widespread problem for emerging markets, but it was notable that external finance requirements – the sum of current account deficits plus maturing external debt – remained large in a handful of countries, such as Malaysia, Turkey and SA.
“These countries could find themselves under pressure over the next 12 to 18 months if they don’t take steps to rein in external financing requirements and the US Fed resumes its tightening course, thereby increasing external funding costs,” he said.
Among individual shares on the JSE, Anglo American rose 3.98% to R114.32 and BHP Billiton climbed 2.33% to R159.99.
Sasol showed little reaction to the soaring oil price, ending the day 0.15% weaker at R419.35.
Oakbay Resources and Energy closed the day 10.45% lower at R24 with an ask value of 27 shares and a volume of R2,635 traded. The company has 800-million shares in issue, giving it a market cap of about R19.2bn.
The company announced on the day the resignation of nonexecutive chairman Atul Gupta, and CEO Varun Gupta, with immediate effect.
Additionally, Duduzane Zuma, has resigned as a nonexecutive director of Shiva Uranium, a major subsidiary of the company.
SABMiller shed 1.94% to R883.55.
AngloGold Ashanti gave up 2.60% to R214.27, with Harmony Gold losing 2.50% to R56.45.
Standard Bank recovered 3.22% to R122.82 and Barclays Africa regained 4.42% to R135.75 after losing ground earlier this week following Standard and Poor’s revising downward its growth forecast for SA for 2016.
Redefine Properties rose 2.33% to R11.84.
Illovo Sugar was one of the star performers of the day, closing 15.43% higher at R23.71. UK-parent company Associated British Foods made a firm offer of R25 per share to buy out minorities on Friday, a 22% premium to Thursday’s R20.54 closing price.
Industrial group Remgro gained 1.86% to R248.69.
Mediclinic International dropped 1.23% to R193.71.