South Africa’s main stock index rose for a fifth day and headed for a third consecutive record close, with banks rallying as optimism over a global economic rebound fueled appetite for riskier assets. Local market giant Naspers Ltd. added impetus to the advance, rebounding from Thursday’s losses as global technology shares rose. South African shares have climbed 68% from the pandemic-selloff low plumbed last March, and the recent rapid ascent has pushed the 14-day relative strength index on the gauge to almost 80, the highest since 2017. That’s well beyond the level of 70 viewed by some technical analysts as a signal that the gains may be overdone. The rand was the best-performing emerging-market currency against the dollar Friday, helping to drive gains in bank stocks. An index of local lenders surged 3.5%, adding to Thursday’s 3.1% increase. FirstRand Ltd. rose 4.5% and Standard Bank Group Ltd. added 3.9%, with the two stocks among the biggest drivers of the overall market strength. Sasol Ltd. was prominent among gainers, climbing 4.1% with Brent oil topping $55 a barrel for the first time since February as Saudi Arabia’s unilateral output cut eased over-supply fears and amid the optimism on U.S. stimulus spending. Sasol’s 25% New Year surge makes it the best-performing Johannesburg stock early in 2021.
SOURCE: BLOOMBERG