Johannesburg - South African share markets once again were uncertain and moved sideways last week.
Market sentiment on a possible increase in US interest rates in two weeks became stronger and is now on a 70 percent expectation. Several Federal Reserve officials as well as the chairperson Janet Yellen hinted that a hike was on the cards.
Despite these expectations, the rand traded in a narrow band against the dollar. In reaction, rand hedge stocks and especially resources came under pressure as commodity prices contracted.
The all share index closed Friday on 51708 points. This was only 0.2 percent up on the previous Friday.
Over the week, financial shares gained 1.2 percent as the negative sentiment on the foreign exchange dealings saga started to play a lesser role on banking stock. The industrial sector, however, continues to move weaker given sentiment of a US rate hike and weak domestic consumer demand.
The industrial index traded 1.2 percent lower. The resource 20 index lost 2.8 percent since the previous Friday. The property share index for the week had moved downwards by 0.6 percent, while bonds closed almost unchanged.
Positive sentiment persisted in the US after President Donald Trump’s budget speech earlier in the week and the Dow Jones industrial index traded above the 21100 level at one stage.
The rand depreciated only marginally against the dollar (14c or 1.2 percent to R13.07) and by 15c or 1.1 percent against the euro last week.
At the close of the JSE on Friday, the rand was quoted at R15.97 or 13c (0.8percent) stronger against the pound than the previous Friday.
The relative strong rand and lower international oil prices relates to a possible decrease in the petrol price at the beginning of April, despite an increase of 30c a litre in the fuel tax and 9c a litre for the Road Accident Fund on April5.
This Week
All eyes will be on the announcement of South Africa’s economic growth data for the fourth quarter of last year, as well as the growth rate for the whole of the year.
The release of the US employment figures for February on Wednesday and Friday will give clear indication on a possible US rate hike in two weeks.