The JSE ended the week quite a bit lower with the JSE Top-40 declining by more than 1% on Friday as most shares declined from their record highs of the previous week due to the sharp falls in international markets on the growing political tensions in Ukraine.

The Russian stock market fell by 5% on Friday after the news that Russia deployed more troops in its erstwhile state, a major exporter of commodities. Any share with links to Russia declined on whatever stock exchange it traded, which spooked investors enough to keep their fingers off the buy button.

Gold ended the week with a strong spurt, increasing by nearly 1.2% to $1385 per ounce on Friday. It is its highest level in more than 6 months.

SA gold shares reacted as expected, with AngloGold Ashanti [JSE:ANG] adding more than 6%  and marginal gold producer DRD Gold [JSE:DRD] increasing nearly 10%. Gold Fields [JSE:GFS] raced ahead by some 13%.

The strength in the gold mining sector did not flow over to the rest of the mining board, mainly because of indications that the Chinese economy is still heading for slower growth. This put a damper on commodity markets.

Exxaro [JSE:EXX] dropped 8% and Kumba Iron Ore [JSE:KIO] fell a massive 17% since the previous Friday’s close. Evraz Highveld [JSE:EHV] dropped 35% after it announced that it is unable to raise new working capital which puts its future at stake.

The rest of the market suffered from this negative sentiment. One could count the shares that still increased on the JSE on one hand – without using every finger more than four times.

Industrial conglomerates Bidvest [JSE:BVT] and Remgro [JSE:REM] both showed solid gains, the latter in expectation of good results. Remgro will announce its results for the 6 months to December on Tuesday.

So-called defensive stocks such as AVI [JSE:AVI], Astral [JSE:ARL], Pick’nPay [JSE:PIK] and Shoprite [JSE:SHP] were amongst the risers, as well as MTN Group [JSE:MTN] after its good results last week.

The week ahead

Investors can expect that the political showdown in Ukraine will continue to put a lid on markets in the next few weeks, while local economic news will do little to improve sentiment and morale.

The South African Reserve Bank had little good news in its latest quarterly bulletin, while several confidence indexes and related surveys pointed to difficult economic times going forward.

StatsSA will announce consumer inflation numbers – once again expected to be around 6%.

Later in the week StatsSA will publish January retail sales figures, also expected to be somewhat subdued compared with the last few months.

This week sees a meeting by the top officials of the US Federal Reserve to decide whether to change interest rates.

Interest rates are not expected to change, but the meeting will once again put the international spotlight on America’s monetary policy to start reducing their programme of bond purchases.

It seems that the market might end the week somewhat lower again.