Johannesburg - Mining stocks led a rally in South African shares, with the benchmark index advancing the most since March 17, as some investors bet that a weaker dollar will prove positive for commodity prices.
The FTSE/JSE Africa All Share Index gained for the first time in four days, ending the longest losing streak since February 11. The gauge added 1.6 percent, the most in almost two weeks on an intraday basis, and rose to 52 527.02 as of 11:20 a.m. in Johannesburg. The quarterly gain is 3.6 percent, the most since March 2015.
The dollar headed for its worst month in more than five years after Federal Reserve Chair Janet Yellen doused speculation the US central bank would pick up the pace of interest-rate increases.
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Diversified mining company African Rainbow Minerals climbed as much as 14 percent, platinum producer Lonmin 9.5 percent and Anglo American 8.2 percent.
“They are reacting to the fact that a weaker dollar is good for commodity prices, that’s why those are rallying, but it is counter-intuitive because the rand is moving the opposite direction for them,” Rob Pietropaolo, a trader at Vunani Private Clients in Johannesburg, said by phone.
The South African rand strengthened for a second day to trade below 15 per dollar for the first time this year. The currency was 0.9 percent firmer at 15.0387 at 11:19 a.m.
“The All Share has staged remarkable recovery after the global rout which marked the worst January for global markets in recorded history,” Pietropaolo said. “Looking ahead, I would expect the index to find some support near the psychological 50 000 level.”
BLOOMBERG