Rand flat, banking stocks weigh on JSE
THE RAND was flat yesterday, taking a breather after a week of volatile trade driven by swirling speculation that President Jacob Zuma would step down before his term ends next year.
Stocks were led lower by banking stocks which came off a previous rally on the back of rumours of Zuma’s early exit.
At 5pm, the rand bid at R12.4392 to the dollar, 1.37 firmer than at the same time on Wednesday, having opened at R12.4325 and weakened to the R12.50 psychological mark before clawing back some ground as economic data from the US disappointed.
In the previous session the rand briefly slipped to a two-week low of R12.55 after the ANC said an early exit for Zuma had not been discussed at a party meeting.
The rand has breached R12.50 three times since the beginning of the year but has failed to close above that level. It has also stopped shy of the 21-day moving average at R12.60, opening the door to gains towards the R12.25 level as investors buy the currency based on trend analysis.
A higher gold price, South Africa’s chief commodity export, also supported the rand. Gold prices rose yesterday to near their highest in four months after a hawkish tone in the minutes of a European Central Bank meeting pushed the euro sharply higher against the dollar.
The dollar also weakened after data showed a rise in US jobless claims and a decrease in the country’s producer prices.
Locally, manufacturing figures showed the sector expanded 1.7 percent in November, a touch higher than forecast, easing pressure on the rand as the economy showed further signs of recovery.
Bonds weakened, with the yield on the government issue due in 2026 adding 1.5 basis points to 8.61 percent.
On the bourse, the benchmark JSE Top40 index dropped 0.65 percent to 52 824.8 points, while the all share index lowered 0.62 percent to 59 606.02 points.
The banking sector weakened 2.07 percent, with First Rand falling 3.11 percent to R61.04, Nedbank dropping 1.96 percent to R249.22 and Standard Bank weakening 1.84 percent to R187.44.
Miners Gold Fields and Sibanye gained 2.17 percent and 1.05 percent to R53.59 and R16.37, respectively.