The Johannesburg Stock Exchange (JSE) has seen a major rally this week, with the All Share Index climbing more than 1% on Wednesday, breaching the 90 000 mark for the first time in history.

The rally was led by retailers and commodities as Pepkor's share price rose 6.3% followed by Mr Price at 5.9%. Truworths at 3.8% and TFG 3.5%, while African Rainbow Minerals rose by 4.7%, Anglo Gold at 3.6% and DRDGold at 3.0%.

Investec economist, Annabel Bishop told Business Report on Wednesday thatrisks in investor sentiment had subsided now that the 2025 Budget had been tabled by the Minister of Finance, Enoch Godongwana.

Bishop added added that copper prices had lifted, a key for many mining houses in South Africa, on China’s stimulus and tariff hike expected from the US, with copper also key in renewable energy infrastructure.

She said the US had already increased tariffs on steel and aluminium articles, and was investigating copper production in the US, and the need for protectionism.

However, Bishop said the US was facing significant vulnerabilities in the copper supply chain, with increasing reliance on foreign sources for mined, smelted, and refined copper, but has ample copper reserves.

"Our smelting and refining capacity lags significantly behind global competitors. A single foreign producer dominates global copper smelting and refining, controlling over 50% of global smelting capacity and holding four of the top five largest refining facilities," she said.

"This dominance, coupled with global overcapacity and a single producer’s control of world supply chains, poses a direct threat to US national security and economic stability.

"Investors have seen SA as good value, and with the budget out of the way, risks have subsided. The country has a positive growth outlook, and marked progress is expected this year on the country’s freight capacity, after last year saw a sharp reduction in electricity insufficiency."

Adding to the rally from the JSE, according to the multinational investment bank and financial services company's chief investment office, UBS, gold prices have again reached a new all-time high.

UBS said that gold rallied to as high as $3 031 per ounce on Tuesday after a fragile ceasefire in Gaza appeared to collapse following renewed Israeli military strikes.

"The rise in tensions in the Middle-East comes alongside heightened tariff uncertainty and rising Federal Reserve rate cut expectations. After this latest rally, gold has gained around 15% year-to-date, building on its 27% advance in 2024," UBS said.

"The last time bullion crossed a “thousand-dollar” threshold was when it broke through the $2 000/oz mark in August 2020 amid uncertainty surrounding the Covid-19 pandemic. With the $3 000/oz milestone reached, investors are wondering if gold's appeal can extend further."

The gold rally could also be connected to international relations with the US and its president, Donald Trump.

UBS said, "Tariff concerns have intensified among US trade allies in the weeks since the White House rolled out “fentanyl-related” import duties on China, Canada, and Mexico. US President Donald Trump on Sunday again vowed to impose new reciprocal and sector-specific trade tariffs on 2 April."

Mike Gresty, fund manager at Anchor Capital, said the strong performance of Naspers/Prosus (index heavyweight) in anticipation of Tencent’s results had also contributed to the rall in the JSE.

"This has followed through after the release of those results which appear slightly ahead of expectation," Gretsy said.

"Gold equities have also become a significant weighting and are having another strong day thanks to the gold price that has gone above $3 000 in recent days. It looks like a better day too for most of SA Inc shares, so generally a better day across many fronts."

However, George Pavel, general manager at Naga.com Middle East, said positive developments in Eastern Europe could limit gold’s gains although uncertainty on that front could play in the metal’s favor.

"Traders could continue to monitor the situation in the region and the impact of new developments on sentiment," Pavel said, adding that the US Federal Reserve (Fed) interest decision could also favor the bullion’s short-term outlook.

"If Fed Chair Jerome Powell's remarks signal a shift toward looser monetary policy, non-yielding assets like gold could become more appealing. Conversely, a more restrictive monetary policy could benefit the US Dollar, limiting gold’s upside potential."

Earlier this month, the JSE, reported an increase in net profit after tax of 10.4% to R918-million for its 2024 financial year, with a return on equity of 20.2%, up from 19.4% in the prior year.

The earnings growth and robust performance for the bourse was supported by business resilience and stability, and increased revenue diversification through its non-trading business segments, it said.

BUSINESS REPORT