Rand gains, JSE declines as MTN slides

THE RAND gained yesterday as the dollar fell after the US reported weaker-than-expected inflation and retail sales data.

At 5.30pm, the rand traded 1.25 percent higher at R12.60 to the dollar, after closing at R12.76 overnight in New York, bringing weekly gains to around 2.5 percent.

The unexpected decline in monthly US consumer prices and retail sales suggested inflation pressures were moderating, which might delay interest rate increases by the Federal Reserve.

The prospect of slower-than-expected US rate increases boosts demand for emerging-market assets, which offer higher returns but carry more risk.

The rand held on to gains despite continued fallout triggered by credit ratings downgrades.

A survey showed yesterday that South African business confidence fell deeper into negative territory in the second quarter, to a level not seen since the 2009 recession, as business activity remained week and political risk persisted .

Government bonds also gained, with the yield for the benchmark instrument due in 2026 dropping.

Meanwhile, stocks ended lower as mobile phone operator MTN slid to a four-month low.

Shares in MTN were down 1.98 percent at R111.60. The company counts crude-oil producers Nigeria and Iran among its three largest markets, and oil price fell after reports showed global supply was growing. Royal Bafokeng Platinum retreated 5.02 percent to R27.27.

Gold mining firms were among the gainers as the bullion price rose after the US inflation data.

The benchmark Top40 index fell 0.4 percent to 45 084.86 points. The broader all share index was down 0.26 percent at 51 489.16 points.