Statistics South Africa yesterday revealed that the economy slumped by 1.5 percent in the third quarter, eroding some of the economic gains the country has made since the severe impact of Covid-19 in the second quarter of 2020. Picture: Bongani Shilubane, ANA.
INVESTORS yesterday shrugged off the latest depressing economic growth figures as South African markets rose to an all-time high, buoyed by broad-based gains in banking, telecoms and mining sector stocks as Omicron risks faded for now.
Statistics South Africa yesterday revealed that the economy slumped by 1.5 percent in the third quarter, eroding some of the economic gains the country has made since the severe impact of Covid-19 in the second quarter of 2020.
Despite this, the JSE All Share Index rose by 2.71 percent to a record 72 939 index points by 5pm, driven up by stocks in the resources groups, but shares in pharmaceuticals, food producers and healthcare groups fell.
South32 was the biggest winner, gaining 11.37 percent to R41.83 per share followed by Anglo American at 6.85 percent to R632.99 per share while Aspen Pharmacare fell 2.58 percent to R217.01 per share.
“Markets flushed out at the first sign of Omicron, but now are more confident it won’t be as bad as first feared,” said Neil Wilson of Markets.com.
“There will still be restrictions on liberty for no good reason, and therefore potential growth, but as we have consistently seen during the pandemic economic sentiment does not equal market sentiment.”
Meanwhile, the rand remained virtually unchanged at R15.94 to the greenback by 5pm following a significant sell-off last month amid a stronger dollar and as uncertainty around the Omicron variant persisted.
However, investors’ risk-off sentiment has since eased over signs that the Omicron variant may mainly be causing mild infections.
South African virologists and experts are suggesting that Omicron may be causing less severe clinical symptoms than other coronavirus variants.
However, they have cautioned that more research was needed before definitive conclusions could be drawn.
South Africa is currently at the lowest alert level 1 lockdown strategy, but there is speculation that this may be reviewed soon as infections soar exponentially.
siphelele.dludla@inl.co.za
BUSINESS REPORT ONLINE
Related Topics: