Rand firms on improved sentiment, stocks down
The rand firmed on Wednesday as global market sentiment improved, with investors hopeful that a trade agreement can be reached between United States and China.
JOHANNESBURG - The rand firmed on Wednesday as global market sentiment improved, with investors hopeful that a trade agreement can be reached between United States and China.
Stocks, led by the retail sector, fell on concerns around the local economy which in turn weighed on shares whose primary business is in South Africa.
At 1524 GMT, the rand was up 0.49% at R15.1950 per dollar, after it closed at R15.2700 on Tuesday.
Markets have begun October nervously, and this week has seen investors dump stocks on concerns the US-China conflict over trade and foreign policy is nowhere near a resolution and is increasingly damaging the global economy.
“Yesterday the rand overshot a bit. Today it’s just the market taking stock of what happened yesterday and realising it was negative but was not as negative as it could be,” said TreasuryONE senior dealer Andre Botha
The rand is one of the most liquid and frequently traded emerging-market currencies, and a high degree of foreign investment makes it sensitive to offshore events and swings in risk sentiment.
Bonds were slightly higher, with the yield on the benchmark 2026 paper down 5 basis points at 8.230%.
The benchmark Top-40 stock index fell 0.32% to 48,311 points, while the All-Share index dropped 0.35% to 54,339 points.
Among the biggest fallers were general retailers, which dropped 2.26%, with Truworths down 5.32% at R50.33 and TFG 3.64% lower at R157.39.
“(There are) concerns around domestic performance and we are seeing that in all these South African Inc shares and a lot of them are down on the day,” said Paul Chakaduka, trader at Global Trader.
Further losses were curbed by the bullion sector, up 2.72%, amid safe-haven buying and a higher spot gold price.
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