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Rand weaker on US inquiry into Trump impeachment, stocks fall

At 1515 GMT, the rand was down 1.03% at 15.0150 versus the dollar.

Picture: Supplied.

JOHANNESBURG - South Africa’s rand weakened on Wednesday after the launch of a formal impeachment inquiry against U.S. President Donald Trump rattled global markets.

At 1515 GMT, the rand was down 1.03% at 15.0150 versus the dollar.

The move by Democrats in the US Congress on Tuesday to launch a formal impeachment inquiry of Trump unnerved global investors, dampening demand for riskier assets.

“The announcement that the House of Representatives will launch a formal impeachment inquiry against US President Donald Trump is eroding global market sentiment,” said Bianca Botes, Treasury Partner at Peregrine Treasury Solutions.

Trump also fanned US-Sino trade fears on Tuesday delivered a stinging rebuke to China’s trade practices at the United Nations General Assembly, though he told reporters after the South African stock market close on Wednesday that a trade deal could happen sooner than expected.

Locally, the country’s central bank said on Wednesday South Africa saw larger foreign direct investment (FDI) inflows in the second quarter of the year, worth R26.3 billion.

In fixed income, government bond prices slipped, with the yield on the benchmark note maturing in 2026 up 0.5 basis points at 8.35%.

On the bourse, stocks fell with the broader All-share index down 1.3% at 54,877 points, while the blue-chip Top-40 index weakened 1.4% to 48,865 points.

Dragging the bourse lower were financials which declined 2.2%, with RandMerchant Bank down 3.3% to R75.51, while FirstRand fell 2.87% to R62.30, and Absa closed down 2.8% at R157.01.

Bullion miners rose 2.66%, benefitting from safe haven buying.

Gold Fields increased by 4.1% to R81.20, Sibanye-Stillwater gained 3.6% to R20.83, and AngloGold American strengthened 2.2% to R312.31.

Clover Industries Ltd shares rose 4.75% to R23.59 after South Africa’s competition watchdog on Wednesday approved its takeover by Milco SA, for R4.8 billion.

“I think there’s been so much speculation about this deal being on and off. It seems like it’s going to go through. They’ve passed all the hurdles...so it’s looking good,” said Gerhard Parkin, portfolio manager at BP Bernstein.