MARKET WRAP: Rand and JSE look set to end 2019 on a high note

The JSE capped its best fortnight since June on Friday and now looks set for its strongest month in six as it rides the wave of positive global market sentiment fueled by the agreement to implement the first phase of a US-China trade deal.

Investor uncertainty has been tempered somewhat with the tariff issue having been put to bed for now, while the outcome of the UK’s general election, which saw Boris Johnson’s Conservative Party winning an overwhelming majority, all but sealing the deal on Britain’s exit from the EU.

The rand also continues to ride the wave of optimism in global markets, having now erased all its 2019 losses, despite a pessimistic outlook for the local economy, and following the announcement by ratings agency Fitch on Wednesday that it would keep SA’s credit rating unchanged, with the negative outlook remaining in place. The agency highlighted risks posed by the country’s low GDP growth, rising government debt, and its exposure to state-owned entities such as Eskom and SAA.

The rand reached its best level against the dollar since July earlier on Friday, at R14.16, and while the JSE was a little lower on the day, it was higher for the week.

European and Asian markets were mixed late on Friday, with volumes beginning to dwindle ahead of the holiday season.

US President Donald Trump’s impeachment by the House on Wednesday evening has had little effect on markets as it is extremely unlikely that he will be removed him from office in a trial by the Republican-controlled Senate.

“It’s been quite a strange week, all things considered. The US president has been impeached, we’ve got a new UK government after it was confirmed around this time last week that the Conservatives had won their biggest majority in decades,” said Oanda senior market analyst Craig Erlam.

“I guess when you remove all of the political theatre and strip it down to what it all means, there’s nothing there that really moves the needle and, ultimately, that’s all investors care about.” 

The JSE all share ended the day down 0.26% at 57,411.2 points, while the top 40 fell 0.23%. The all share is now up 8.86% in 2019 after losing 11.37% in 2018.

At 5.52pm, the rand had pulled back a little and was 0.13% weaker at R14.2438/$. It is now 0.75% firmer to the dollar in 2019.

- BusinessLIVE