#RandReport: Local and Chinese data hits the rand and stocks
The rand eased on Tuesday after data showed a widening current account deficit.
JOHANNESBURG - The rand eased on Tuesday after data showed a widening current account deficit, while stocks were spooked by brittle Chinese trade figures that sent Kumba Iron Ore shares into a tailspin.
Kumba shed 18.5 percent to 9,050 rand, but did not yield all of the massive gains it made on Monday, when its share price soared over 30 percent on an iron ore rally.
But its share price has strayed deeply into overbought territory according to momentum indicators and analysts said news that China's February trade performance was far worse than economists expected, with exports tumbling the most in over six years, gave dealers an excuse to book profits.
"The iron ore shares have had a pretty good run so probably there is some profit-taking. And the China data is a bit of a reality check that says the China problem is not over," said Bart Stemmet, an analyst at NKC African Economics.
Other stocks also fell after the weak data from China reinforced persistent concerns about a possible slowdown in the global economy.
Johannesburg shares of platinum producer Lonmin, which has also had a strong recent rally, slid almost 11 percent, while Anglo American slumped nearly 9 percent to 119.69 rand.
Outside the mining sector, South Africa's biggest lender by market value FirstRand Ltd saw its shares tank 7.4 percent to 45.60 rand after it reported only a slight increase in half-year profit as slowing growth in its Africa markets capped earnings.
The benchmark Top-40 index fell 0.8 percent to 46,229.48 while the broader All-share index closed 0.81 percent lower at 52,247.84. Trade was slightly brisker than average, with about 295 million shares changing hands.
The rand faltered after the current account deficit rose more than expected, in another sign that the domestic economy is struggling. Data from the central bank showed it widened to 5.1 percent of GDP in the fourth quarter as exports slumped and imports stalled, with weak global commodity demand hitting the mining and manufacturing sectors.
By 1610 GMT the rand had weakened 1.2 percent to 15.4450 per dollar, reversing modest gains of the previous session as the weak current account and trade balance data soured sentiment.
Government bonds were also weaker, with the benchmark paper due in 2026 adding 1 basis point to yield 9.325 percent.
"The weak Chinese trade, where both imports and exports contracted by a larger margin than expected. And then South Africa's current account came in a lot wider than expected. Those were the big drivers today," said Ricardo da Camara, economist at ETM Analytics.