JOHANNESBURG - Despite the ongoing political tensions between the US and North Korea after the missile attack over Japan and the hurricane that hit the US, financial markets across the board tended to move firmer.
Most share indices remained strong after the US announced that its economic growth rate during the second quarter had increased to a 3percent annualised rate.
The US also released its inflation rate for July at 1.7percent, against 1.6percent in June, but lower than the expected 1.8percent. This indicates that a US interest rate hike may come later than sooner. In reaction, the Dow Jones industrial index tested the 22000 points level again on Friday, gaining almost 1percent for the week. The Standard & Poor’s advanced more than 1.2percent and the Nikkei 225 index in Japan also rose 1.2percent for the week.
Markets across the globe are expected to react on the latest jobs data of the US announced on Friday. The world’s biggest economy had a non-farm payrolls increase of 156000 in August, while its unemployment rate advanced slightly from 4.3percent to 4.4percent.
The persistent sluggish wage growth, however, would make the US central bank cautious about raising interest rates this year. Therefore, it is expected that the dollar will stay under pressure and that share prices are likely to continue to increase.
Locally, South Africa awaits the publication of the GDP economic growth rate data by StatsSA tomorrow. The economy recorded negative growth rates of - 0.7percent and - 0.3percent during the fourth quarter of 2016 and the first quarter of 2017.
The all share index on the JSE moved sideways after reaching a new record closing level of 56656 points the previous Friday. The index ended flat on Friday on 56513 points, or only 0.25percent lower than the record level.
Over the week, the industrial index decreased 0.9percent, while financials lost 1percent. The listed property index recovered strongly last week, gaining 2percent.
The rand continued to recover. Just after the close of the JSE on Friday, it traded at R12.88 to the dollar. This was 12c (0.9percent) stronger than a week ago. Against the pound, the rand had firmed by 5c (0.3percent), trading at R16.70.