Washington - Fears surrounding US interest rates hike last week quickly subsided after the chairperson of the Federal Reserve, Janet Yellen’s dovish tone at a news conference.
Yellen painted a more positive picture for the US economy for the rest of the year, despite the possibility that further rate increases may occur.
Optimism over the world economic growth, as well as increase in the Fed’s forecast of the US economy to 2.1percent this year, and next year, changed the financial markets towards optimism since last Wednesday.
This renewed bullish sentiment on global stock markets also favoured emerging market currencies and boosted commodity prices.
Despite negative news of a sluggish business confidence in South Africa, as well as negative retail sales, down 2.5 percent, recorded during January, the JSE, bond markets and the listed property sector turned positive during last week.
The JSE all share index closed Friday on 52550.99 points. This was 1280 points, or 2.5 percent, higher than the previous Friday. Over the week, financial shares gained 1.7 percent, while the industrial sector increased 1.9 percent. The resource 20 index was 4.8 percent higher than the previous Friday after the big sell-off of more than 5.5 percent the previous week.
The property share index for the week had increased by 1.1 percent, while the R186 bond closed on 8.5 percent, or 2.2 percent stronger than the previous week.
The rand appreciated strongly since last Wednesday and reached the R12.68 to the dollar level on Thursday, much stronger than the R13.15 earlier in the week. The currency on Friday traded at R12.74, or 3.1 percent, stronger for the week just after the close of the JSE. The rand was quoted at R15.73, or 1.3 percent, stronger against the pound than the previous Friday, and gained 2 percent against the euro on R13.69.
Given the stronger rand and the decrease in the international oil price, the over-recovery for both petrol and diesel increased last week.
Figures from the Central Energy Fund on Friday showed that since the previous price fixing on February 24, the price for Petrol95 was 55c a litre over-recovered. Petrol93 was over-recovered by 52c and diesel by 32c.