Investors are set to keep an eye on mining and banking stocks next week ahead of the Reserve Bank's Monetary Policy Committee meeting to decide on interest rates and its impact on the currency, traders said. "Two weeks ago consensus was that there would be a rate cut and the market had priced it in but now there is no longer any certainty due to the weaker rand," trader said.
"If the central bank cuts, the rand will weaken and banks and industrials will suffer while resource stocks gain."
According to a Reuters poll, 12 out of 18 analysts see the Reserve Bank holding its repo rate at 7.50 percent at the February 9-10 meeting while 6 see a cut of 50 basis points. Four analysts who see no move next week see the bank cutting in April.
Five see no move in rates until 2006 when they expect them to go up.
The rate decision is expected just after 1300 GMT on Thursday.
"The rand will drive everything but I think the best place to be is value based resource stocks," a trader said.
He singled out petrochemicals group Sasol and the world's second biggest platinum producer Impala Platinum as the likely favourites.
"Even if the currency strengthens these have strong fundamentals and investors can still benefit. But I would be cautious," the trader said.
Abri du Plessis of Gryphon Asset Management said the market was likely to continue its recent performance. On Thursday the market steamed to an all-time closing high as a weaker rand boosted resource stocks.
The Johannesburg top-40 blue chip index hopped to a historic closing high of 11,766.03 points while the all-share index closed above 13,000 points for the first time at 13,016.60.
"The rand will weaken irrespective of the central bank's decision and in the process lift commodities which will pull the market up," said Du Plessis.
On the results front Ispat Iscor, which has been boosted by surging world steel prices, will report its annual results on Thursday.
According to a poll conducted by Reuters Estimates, a consensus mean of seven analysts expected earnings per share of 999,537 cents.
"I think the main focus will be on the performance domestically. We have an idea how they are doing offshore with demand form China but that's not the case here," said Du Plessis.
Iscor changed the end of its financial year to December from June to be aligned with majority shareholder LNM.