#RandReport: Rand and stocks slide on weaker risk appetite

The rand was at 15.8120, down 1.15 percent from Tuesday’s close of 15.6325.

Picture: Christa Eybers/EWN

JOHANNESBURG - The rand fell more than one percent against the dollar on Wednesday, reaching its weakest level in more than three weeks as the dollar added to earlier gains on solid jobs data.

Stocks followed Asian and European markets lower to a two-week trough as mining stocks weighed on the bourse.

A softer-than-expected Purchasing Managers' Index reading, which showed that private sector activity shrank at a faster pace in December, "confirmed the dire prospects for the local economy", analysts said.

Adding to the pressure, the rand also faced a depreciating yuan. China's central bank set its daily guidance rate at its lowest in more than 4-1/2 years, triggering selling in offshore yuan, which slumped to its lowest since trading began in 2010.

"People are just nervous and looking for safety. In situations like those, your higher risk assets such as the rand get sold off," ETM Analytics market analyst Ricardo Da Camara said.

By 1519 GMT the rand was at 15.8120, down 1.15 percent from Tuesday's close of 15.6325.

Government bonds were firmer, sending yields lower due to lack of supply in the market. The yield on South Africa's benchmark 2026 issue was down nine basis points to 9.555 percent.

On the bourse, Anglo American was the worst performer among the blue chips, sliding 6.43 percent to R61,28, while shares in larger rival BHP Billiton declined 4.87 percent to R162,74.

The benchmark Top-40 index declined 1.17 percent to 44,150.46 points, while the broader All-Share index dropped 1.04 percent to 49,082.29.

Trading volume in the market was below average, with 175 million shares changing hands compared with las year's daily average of 223 million.