Stocks rise as vaccine hopes spur risk-on sentiment

Investor focus will be on central banks this week.

South Africa’s main stock index gains 0.4% by 9:49 a.m. in Johannesburg, advancing for the sixth consecutive day, the longest streak of gains since January, as signs of progress toward a virus vaccine lifts risk appetite, driving markets higher.

More than 50% of the listed South African companies climb, with the four biggest stocks — Naspers, Anglo American, BHP Group and Richemont, which make up 46% of local market capitalisation — leading the advance.

Investor focus will be on central banks this week, with the US Federal Reserve expected to maintain its dovish stance on policy as investors look for signs the global economy is recovering from the pandemic, while the South African Reserve Bank has analysts and traders divided about prospects for another rate cut. Seven of 12 economists in a Bloomberg survey predict the central bank will cut the repo rate by 25 basis points to a record low 3.25% on Thursday. The other five see rates on hold, while money markets are pricing about a one-in-three probability of a 25-point cut.

• Naspers advances for a fourth session, rising 1.5% to its highest in more than a week as a resumption of the tech rally lifts partly owned Tencent, in Hong Kong. Naspers subsidiary Prosus NV advances 1.7%.
• Luxury retailer Richemont rises 1.4%.
• Index for bank stocks gains 0.7% as the rand advances for a second day. Standard Bank +1.1%, FirstRand +0.3%, Absa Group +0.6%, Capitec Bank Holdings +0.5%, Nedbank Group +0.9%, Investec Plc +1.5%.
• Diversified miners BHP and Anglo American lift mining index, which gains 0.8%. Anglo American +2.4%, BHP +1.5%, Gold Fields +1.4%, Glencore Plc +1.4%, DRDGold +2.6%, African Rainbow Minerals +0.1%.
• Bidvest +6.1% after company publishes full year earnings.
• Foreigners remained net buyers of South African stocks for a third day Friday, purchasing R466 million worth of shares, according to bourse operator JSE Ltd.

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