Chris Harmse. Chief Economist at Rebalance Fund Managers. Via LinkedIn
CAPE TOWN - Sound economic fundamentals globally and domestically as well as mostly better than expected listed company earnings helped financial markets over the world to continue to recover during the first part of last week.

The geopolitical tensions between the US and Russia over the Syria chemical bomb attack, renewed worries about oil stock and prices, and the unresolved Washington-Beijing trade war could not prevent the positive effects of sound economic fundamentals last week.

Data showing that the Chinese economy had grown by 6.8percent during the first quarter of 2018, as well as better than expected US retail sales (0.6percent in March), boosted appetite for risk assets like shares on world markets initially last week, only to contract again on Thursday and Friday.

The Dow Jones industrial average at the time of the JSE close on Friday had gained only 109 points, or 0.4percent, since the previous Friday.

Several ships carrying sorghum from the US to China had to change course due to hefty anti-dumping deposits on their cargo.

Together with this trade dispute, emerging markets, South Africa included, saw a sharp depreciation of their currencies last Thursday and Friday as tech stocks also tumbled on global markets given worries of a decrease in the demand for smartphones.

The steady increase in US long bond rates was also detrimental for emerging markets shares and currencies. .

On the local front, data showing the lowest inflation rate of 3.8percent since 2011, as well as the sharp increase in retail sales to 4.8percent in February, boosted financial markets during the first part of last week.

The sharp increase in the oil price, as Brent crude oil at one stage traded just under $75 a barrel (about R895), also contributed to steady increases in other commodity prices, with the gold price moving to a record this week of above $1355 an ounce.

On the JSE, the all share index at one stage traded above 58000 points. This was more than 1500 points above the 56563 close of the previous Friday. The rand recovered sharply up to Wednesday but fell on Thursday and Friday.

The views expressed in this article are not necessarily those of the Independent Group.