The JSE. Photo: Simphiwe Mbokazi.

South African stocks ended the week higher on Friday as investors, encouraged by a European Union agreement to stem the region's debt crisis, ventured back into emerging equities and currencies.

The main winners were resources stocks such as BHP Billiton and Anglo American, while banking group Absa halted a three-session slide sparked by a profit warning on Tuesday to close up 1.5 percent at 141.20 rand.

Absa's 10 percent sell-off - its biggest weekly drop since January 2009 - following an admission of an increase in mortgage-related bad debts lopped 15.5 billion rand ($1.8 billion) off the value of the Barclays controlled bank.

Overall, the benchmark Top-40 index closed 1.48 percent higher at 29,638.01 while the broader All-Share Index rose 1.37 percent to 33,708.31.

“Markets are still very sensitive but there is still a lot of yield-searching going on. The defensive dividend payers are still doing well,” said Ferdi Heyneke, a portfolio manager at Johannesburg-based brokerage Afrifocus.

The euro spiked about 2 percent in its biggest daily gain for 8 months and the South African rand followed suit, rushing through resistance levels against the dollar early in the day.

The rand's strength was also fuelled by data showing higher-than-expected growth in credit and money supply.

Shares in BHP Billiton ended more than 4 percent firmer at 235 rand and Anglo American gained almost 3 percent to 271.30 rand as commodity-related assets rallied.

Europe is one of the largest buyers of South African minerals and metals.

However, the stronger rand held back gold stocks, which are ordinarily cheered by stronger spot prices. Spot gold rose as high as $1,600 an ounce during the day.

Africa's largest gold producer, AngloGold Ashanti, lost almost 1.5 percent to 279, ending the day among the Top-40s three worst performers. Rival producers Gold Fields and Harmony were little-changed.

A total of 245 million shares changed hands, up from 190 million the previous session. Advancers outpaced decliners 191 to 90 while 73 stocks remained unchanged. - Reuters