Rand hedges, resources weigh on JSE

FTSE/JSE Africa Index Series

SOUTH African share markets lost steam last week on uncertainty of the effect of orders signed by the Trump administration, as well as the sell-off of rand hedges and resources, as the rand exchange rate appreciated noticeably.

Although the Federal Open Market Commission of the US Federal Reserve decided not to increase interest rates, uncertainty still prevails, especially after the US Labour Department announced on Friday that the economy created 227 000 new jobs in January and that the unemployment rate was 4.8 percent.

These figurers led to market sentiment of an early increase in the US bank rate. US share prices reacted positively on the jobs data and shortly after the opening of Wall Street, The Dow Jones industrial average traded once again above the 20 000 points level.

Share prices on the JSE ended the week weaker. The all share index closed Friday on 52 265 points. This was 702 points or 1.3 percent lower than the close level of the previous Friday. The index is however still 3.2 percent higher since the start of the year.

Financial shares lost 1.5 percent, while the industrial sector decreased by 0.6 percent.

The resource 20 index lost the most throughout the week and traded down by 3 percent. The index, however, is still 7.2 percent higher since the end of last year.

The property share index also lost ground and traded 0.6 percent lower over the week. The R186 bond rate had decreased by 3 points, or 0.3 percent to 8.86 percent at the close on Friday.

The rand exchange rate appreciated against the major currencies, especially on Friday.

Just after the close of the JSE on Friday, the rand traded at R13.22 to the dollar. This was 42c, or 1.7 percent, stronger than the previous Friday.

Against the euro, the currency traded at R14.26 or 1.1 percent, firmer for the week, while it appreciated by 37c, or 2.2 percent, against the pound at R16.50.