South African Stocks Climb to 2018 High With Index Above 60,000

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South Africa’s main equities index rallied beyond the 60,000 points level for the first time since August 2018, benefiting from positive sentiment toward riskier assets as investors mulled speculation Washington lawmakers are edging closer to a U.S. stimulus deal.

The benchmark FTSE/JSE Africa All Share Index gained 1.5% to 60,353 at 10 a.m. in Johannesburg, with miners, banks and retailers prominent among gainers. South African markets were shut Wednesday for a public holiday.

South African Stocks Climb to 2018 High With Index Above 60,000

An index of mining stocks was 2% higher, with diversified giants BHP Group Plc, up 2%, and Anglo American Plc, rising 2.5%, leading the gains.

Bank stocks climbed 1.7%, with FirstRand Ltd. advancing 2.5%, Absa Group Ltd. rising 3.9% and Standard Bank Group Ltd. up 1.8% as the rand strengthened for a fourth day to a 10-month high against the dollar.

  • NOTE: Rand at 10-Month High on U.S. Stimulus Bets: Inside South Africa

The positive risk sentiment also boosted retailers, with an index of general retailers on a four-day winning streak, up 1.2%, and food and drug sellers rising 1.2%. Pharmacy-chain operator Clicks Group Ltd. jumped as much as 12%, the most on record, before trading 2.7% higher.

MTN Group Ltd. was the biggest drag on the overall market, sliding 11% after Nigeria’s telecommunications regulator ordered mobile-phone users to link their devices to their national identity numbers, raising the prospect of millions of lines being blocked. Johannesburg-based MTN’s local unit is the biggest wireless operator in the West African country.

  • NOTE: Nigeria Orders Mobile Subscribers to Link Phones to ID Numbers

South Africa’s benchmark stock index has risen 5.6% in 2020, rebounding almost 60% from the lows seen in March, but still lagging behind the 14% gain this year in its emerging-market peers.

Globally, investors are awaiting developments on stimulus talks after months of deadlock amid signs the economic recovery is faltering. Meanwhile, the Federal Reserve strengthened its commitment to support the U.S. economy, promising to maintain its massive asset purchase program until it sees “substantial further progress” in employment and inflation.

Foreigners were net purchasers of South African stocks for an eighth day Tuesday, buying 629 million rand ($43 million) of shares, according to exchange operator JSE Ltd.

©2020 Bloomberg L.P.

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